Organisational Structure of Govt of India | Indian Polity for UPSC CSE PDF Download

 Page 1


1 INTRODUCTION
1.1 One of the terms of reference of the Administrative Reforms commission pertains to 
the structure of the Government of India. The commission has been asked to look into the 
following aspects:
1. Organizational Structure of the Government of India 
1.1 Reorganization of Ministries and Departments
1.1.1 Revisiting and redefining the role of the Ministries and 
Departments in the context of evolving role of governance and 
need for greater collaboration.
1.2 Manpower planning and Process re-engineering.
1.3 Suggest ways to position the administrative services in the modern context 
of global integration, emergence of markets and liberalisation.
1.4 To examine if the present system of governance is optimally suited to 
the environment of the times
1.4.1 To suggest a framework for possible areas where there is need for 
governmental regulation (regulators) and those where it should 
be reduced.
1.4.2 To strengthen the framework for efficient, economical, sensitive, 
clean, objective and agile administrative machinery.
1.2 The c ommission in its various Reports has already examined and made recommendations on 
different aspects of governance – transparency in government, public order and anti-terrorism, 
ethics in governance, decentralization and empowerment of local bodies, refurbishing of 
personnel administration, creating citizen centric administration, etc. In the present Report, 
the commission will be analyzing and making recommendations for reforming the structure 
of the Government of India since the sustainability of the other reforms is closely interlinked 
 
 
 
 
 
 
 
 
Page 2


1 INTRODUCTION
1.1 One of the terms of reference of the Administrative Reforms commission pertains to 
the structure of the Government of India. The commission has been asked to look into the 
following aspects:
1. Organizational Structure of the Government of India 
1.1 Reorganization of Ministries and Departments
1.1.1 Revisiting and redefining the role of the Ministries and 
Departments in the context of evolving role of governance and 
need for greater collaboration.
1.2 Manpower planning and Process re-engineering.
1.3 Suggest ways to position the administrative services in the modern context 
of global integration, emergence of markets and liberalisation.
1.4 To examine if the present system of governance is optimally suited to 
the environment of the times
1.4.1 To suggest a framework for possible areas where there is need for 
governmental regulation (regulators) and those where it should 
be reduced.
1.4.2 To strengthen the framework for efficient, economical, sensitive, 
clean, objective and agile administrative machinery.
1.2 The c ommission in its various Reports has already examined and made recommendations on 
different aspects of governance – transparency in government, public order and anti-terrorism, 
ethics in governance, decentralization and empowerment of local bodies, refurbishing of 
personnel administration, creating citizen centric administration, etc. In the present Report, 
the commission will be analyzing and making recommendations for reforming the structure 
of the Government of India since the sustainability of the other reforms is closely interlinked 
 
 
 
 
 
 
 
 
with the creation of a pro-active, efficient and flexible organizational framework. 
1.3 Most of the structures existing in the government are based on the W eberian model of 
division of work - a well defined hierarchy, adherence to rules and, by and large, impersonal 
functioning. These organizational structures have stood the test of time to a considerable 
extent but are more suited to command and control functions and less so when it comes to 
developmental, promotional and facilitative functions of the s tate. India’s position on various 
key human development and economic parameters remains well below desired levels. In a way 
this is a reflection of the structure and functioning of governmental organizations. 
1.4 The commission is of the view that these structures now need to be redesigned in order 
to make our governance apparatus an instrument of service to the people as well as a tool to 
achieve national objectives in the fields of social and economic development. 
1.5 The c ommission obtained the views of different Ministries/Departments on various 
aspects of their mandate and role as well as their organizational structure and internal 
processes. In addition, the questionnaire on civil services reforms sought to elicit responses 
on aspects like minimizing hierarchical tiers in government, shifting towards a decision 
maker oriented system instead of a hierarchical system and creation of executive agencies. 
The commission had also enlisted the help of the Indian Institute of Public Administration 
(IIPA), New Delhi to prepare a background paper on the existing structure. The commission 
also sought the assistance of management experts in getting an overview of the modern 
concepts in organizational structure. The c ommission organized a series of consultations with 
s ecretaries to the Government of India, members of central and All India s ervices as well as 
eminent retired civil servants. During its visits to the s tates, the commission held detailed 
discussions with s tate Governments, retired civil servants and eminent public personalities. The 
c ommission visited s ingapore, Australia, Thailand, France and the u nited Kingdom and had 
extensive discussions with the authorities there to understand the structure and functioning 
of government in those countries as well as the reform measures undertaken by them. As the 
terms of reference of the commission included Regulatory Reform, the commission held 
deliberations with prominent government regulators, both past and present. 
1.6 Though the Report was finalized in April and printed in May, 2009, the 
c ommission would like to record its appreciation for the contributions made by  
Dr. M V eerappa Moily in arriving at the conclusions. Before resigning from the position of 
c hairman ARc , on 31st March, 2009, Dr. Moily had played an important role in guiding 
the deliberations of the commission in finalizing this Report. 
1.7 The commission would like to place on record its gratitude to Prof. Pradip Khandwalla 
for preparing an analytical report titled ‘Revamping Government of India’s Administration 
for Governance Excellence’ . The commission would like to thank shri s K Das, consultant, 
ARc for providing very useful inputs in drafting this Report. The commission is grateful to  
Dr. P.l. s anjeev Reddy, the then Director, Indian Institute of Public Administration (IIPA) and  
Prof. s ujata s ingh, IIPA for preparing a background paper on the existing structure of 
Government of India. The commission would also like to thank shri Nripendra Mishra, 
c hairman, T elecom Regulatory Authority of India; shri Pradip Baijal, Former c hairman, 
T elecom Regulatory Authority of India; Prof. N.R. Madhava Menon, Member, c ommission on 
centre s tate Relations; shri l . Mansingh, c hairman, Petroleum and Natural Gas Regulatory 
Board; shri Vinod Dhall, Former c hairman, competition commission of India; shri M. 
Damodaran, former c hairman, s EBI; shri Prabodh c hander, Executive Director, Insurance 
Regulatory and Development Authority; s hri c .A. c olaco, Adviser (l egal/Regulatory/Policy), 
T ata Power; Ms. V andana Aggarwal, Director, Planning commission, shri Mani, National 
Highways Authority of India and s hri K M Abraham, s hri s ahoo and their team from s EBI for 
sharing their views on reforms in the Regulatory sector. The c ommission is grateful to Dr. K.P. 
Krishnan, Joint s ecretary, Ministry of Finance, for making a presentation to the commission 
on a comparative analysis of Regulators in different sectors in the country. The commission 
acknowledges with gratitude the very useful suggestions made by eminent persons including 
former civil servants and senior officers of Government of India and s tate Governments. The 
commission is particularly grateful to the dignitaries and officers of the countries visited for 
sharing readily the experience with reforms in their respective countries.
Introduction Organisational s tructure of Government of India
Page 3


1 INTRODUCTION
1.1 One of the terms of reference of the Administrative Reforms commission pertains to 
the structure of the Government of India. The commission has been asked to look into the 
following aspects:
1. Organizational Structure of the Government of India 
1.1 Reorganization of Ministries and Departments
1.1.1 Revisiting and redefining the role of the Ministries and 
Departments in the context of evolving role of governance and 
need for greater collaboration.
1.2 Manpower planning and Process re-engineering.
1.3 Suggest ways to position the administrative services in the modern context 
of global integration, emergence of markets and liberalisation.
1.4 To examine if the present system of governance is optimally suited to 
the environment of the times
1.4.1 To suggest a framework for possible areas where there is need for 
governmental regulation (regulators) and those where it should 
be reduced.
1.4.2 To strengthen the framework for efficient, economical, sensitive, 
clean, objective and agile administrative machinery.
1.2 The c ommission in its various Reports has already examined and made recommendations on 
different aspects of governance – transparency in government, public order and anti-terrorism, 
ethics in governance, decentralization and empowerment of local bodies, refurbishing of 
personnel administration, creating citizen centric administration, etc. In the present Report, 
the commission will be analyzing and making recommendations for reforming the structure 
of the Government of India since the sustainability of the other reforms is closely interlinked 
 
 
 
 
 
 
 
 
with the creation of a pro-active, efficient and flexible organizational framework. 
1.3 Most of the structures existing in the government are based on the W eberian model of 
division of work - a well defined hierarchy, adherence to rules and, by and large, impersonal 
functioning. These organizational structures have stood the test of time to a considerable 
extent but are more suited to command and control functions and less so when it comes to 
developmental, promotional and facilitative functions of the s tate. India’s position on various 
key human development and economic parameters remains well below desired levels. In a way 
this is a reflection of the structure and functioning of governmental organizations. 
1.4 The commission is of the view that these structures now need to be redesigned in order 
to make our governance apparatus an instrument of service to the people as well as a tool to 
achieve national objectives in the fields of social and economic development. 
1.5 The c ommission obtained the views of different Ministries/Departments on various 
aspects of their mandate and role as well as their organizational structure and internal 
processes. In addition, the questionnaire on civil services reforms sought to elicit responses 
on aspects like minimizing hierarchical tiers in government, shifting towards a decision 
maker oriented system instead of a hierarchical system and creation of executive agencies. 
The commission had also enlisted the help of the Indian Institute of Public Administration 
(IIPA), New Delhi to prepare a background paper on the existing structure. The commission 
also sought the assistance of management experts in getting an overview of the modern 
concepts in organizational structure. The c ommission organized a series of consultations with 
s ecretaries to the Government of India, members of central and All India s ervices as well as 
eminent retired civil servants. During its visits to the s tates, the commission held detailed 
discussions with s tate Governments, retired civil servants and eminent public personalities. The 
c ommission visited s ingapore, Australia, Thailand, France and the u nited Kingdom and had 
extensive discussions with the authorities there to understand the structure and functioning 
of government in those countries as well as the reform measures undertaken by them. As the 
terms of reference of the commission included Regulatory Reform, the commission held 
deliberations with prominent government regulators, both past and present. 
1.6 Though the Report was finalized in April and printed in May, 2009, the 
c ommission would like to record its appreciation for the contributions made by  
Dr. M V eerappa Moily in arriving at the conclusions. Before resigning from the position of 
c hairman ARc , on 31st March, 2009, Dr. Moily had played an important role in guiding 
the deliberations of the commission in finalizing this Report. 
1.7 The commission would like to place on record its gratitude to Prof. Pradip Khandwalla 
for preparing an analytical report titled ‘Revamping Government of India’s Administration 
for Governance Excellence’ . The commission would like to thank shri s K Das, consultant, 
ARc for providing very useful inputs in drafting this Report. The commission is grateful to  
Dr. P.l. s anjeev Reddy, the then Director, Indian Institute of Public Administration (IIPA) and  
Prof. s ujata s ingh, IIPA for preparing a background paper on the existing structure of 
Government of India. The commission would also like to thank shri Nripendra Mishra, 
c hairman, T elecom Regulatory Authority of India; shri Pradip Baijal, Former c hairman, 
T elecom Regulatory Authority of India; Prof. N.R. Madhava Menon, Member, c ommission on 
centre s tate Relations; shri l . Mansingh, c hairman, Petroleum and Natural Gas Regulatory 
Board; shri Vinod Dhall, Former c hairman, competition commission of India; shri M. 
Damodaran, former c hairman, s EBI; shri Prabodh c hander, Executive Director, Insurance 
Regulatory and Development Authority; s hri c .A. c olaco, Adviser (l egal/Regulatory/Policy), 
T ata Power; Ms. V andana Aggarwal, Director, Planning commission, shri Mani, National 
Highways Authority of India and s hri K M Abraham, s hri s ahoo and their team from s EBI for 
sharing their views on reforms in the Regulatory sector. The c ommission is grateful to Dr. K.P. 
Krishnan, Joint s ecretary, Ministry of Finance, for making a presentation to the commission 
on a comparative analysis of Regulators in different sectors in the country. The commission 
acknowledges with gratitude the very useful suggestions made by eminent persons including 
former civil servants and senior officers of Government of India and s tate Governments. The 
commission is particularly grateful to the dignitaries and officers of the countries visited for 
sharing readily the experience with reforms in their respective countries.
Introduction Organisational s tructure of Government of India
 
2.1.3 India has taken several significant initiatives to improve the quality of governance 
as detailed in our earlier Reports. These include the 73rd and the 74th c onstitutional 
Amendments which aimed to empower the local bodies, the 97th c onstitutional Amendment 
which limited the size of the council of Ministers, the new V alue Added T ax regime and the 
Right to Information Act etc. These indicate that our political system is responding to the 
growing challenges of governance. 
2.1.4 The reasonably swift and efficient response of our administration to a series of major 
natural calamities e.g. the T sunami in December 2004, and the earthquake in Jammu & 
Kashmir - demonstrates that in times of crisis we are able to marshal our resources effectively. 
All these and competent election management show that we have an impressive administrative 
infrastructure and it responds well when objectives are clearly defined, resources are made 
available and accountability is strictly enforced.
2.1.5 However, a lot more remains to be done. There is increasing lawlessness in several pockets 
of the country, and armed groups are resorting to violence with impunity for sectarian or 
ideological reasons. The s tate apparatus is generally perceived to be largely inefficient, with 
many functionaries playing a passive (and safe) role. The bureaucracy is generally seen to be 
tardy, inefficient, and unresponsive. corruption is all-pervasive, eating into the vitals of our 
system, undermining economic growth, distorting competition, and disproportionately hurting 
the poor and marginalized citizens. c riminalization of politics continues unchecked, with 
money and muscle power playing a large role in elections. In general, there is high degree of 
volatility in society on account of poor implementation of laws and programmes and poor 
delivery of public services leading to unfulfilled expectations.
2.1.6 Fulfilment of the human potential and rapid growth are the two fundamental objectives 
of public administration. The ‘non-negotiable’ role of the s tate lies in four broad areas: 
1. Public order, justice and rule of law.
2. Human development through access to good quality education and healthcare 
to every citizen.
3. Infrastructure and sustained natural resource development.
4. s ocial security, especially for the unorganized sector workers.
2.1.7 Propensity to centralize has been the dominant feature of our administration. W e need 
to truly redesign government on the basis of the principle of subsidiarity. A task which can be 
performed by a small, lower unit should never be entrusted to a large, higher unit. 
REORGANISING GOVERNMENT - INTERNATIONAL 
EXPERIENCES
1
2
2.1 Background
2.1.1 Public administration in India faces immense challenges. These include the need to 
maintain peace and harmony, to alleviate deep poverty, to sustain a healthy and inclusive 
economic growth, to ensure social justice and to achieve an ethical, efficient, transparent and 
participative governance. The magnitude of these challenges is evident from India’s ranking 
on various parameters (Box 2.1). 
2.1.2 The sort of public administration 
needed to escalate the growth rate may 
not necessarily be the one that tackles deep 
poverty, seeks to remove inequality, tackles 
corruption, fights criminalization of politics, 
or ensures speedy justice. It is unlikely 
that a single design of the administrative 
machinery will fill all bills. One needs to 
be bold and innovative in designing special 
purpose instrumentalities, some of which 
may apparently be inconsistent with one 
another. For instance, further de-regulation 
may be required to foster economic growth, 
and the s tate may need to withdraw from 
some of the commercial activities that it 
is currently engaged in. At the same time, 
the s tate may need to devise measures to 
more effectively regulate certain sectors 
while pumping more money to improve the 
infrastructure, alleviate poverty and remove 
inequalities. s ome de-regulation can reduce corruption, but other regulations may have to be 
put into place to fight corruption.
Box 2.1 : India’s Ranking on Key Parameters
UN Human Development Report, 2008
From 127 in 2004, India has slipped to 132 in the Human 
Development index, scoring below Equatorial Guinea and 
the s olomon Islands.
IFC/WB Doing Business Report, 2009
India is the most difficult country to enforce contracts in a 
court or otherwise. At 122, it trails Nepal and Bangladesh.
WEF Global Competitiveness Report, 2008
With its inadequate infrastructure, inefficient bureaucracy 
and tight labour laws, India at 50th position, is no match 
for c hina.
Global Corruption Perception Index, 2008
India’s rank has fallen from 72 in 2004 to 85 even as c hina, 
with which it was on par till last year, maintained its position 
at 72.
UNIDO Report, 2009
India, at 54 (down from 51 in 2000), trails c hina by 28 
positions on the competitive Industrial Performance 
Index.
Index of Economic Freedom, 2009
With a shackled judicial system, excessive regulation and a 
“mostly unfree” reputation, India, at 123, trails Gabon.
Source: India Today, April 6, 2009
Reorganising Government - International Experiences  
Page 4


1 INTRODUCTION
1.1 One of the terms of reference of the Administrative Reforms commission pertains to 
the structure of the Government of India. The commission has been asked to look into the 
following aspects:
1. Organizational Structure of the Government of India 
1.1 Reorganization of Ministries and Departments
1.1.1 Revisiting and redefining the role of the Ministries and 
Departments in the context of evolving role of governance and 
need for greater collaboration.
1.2 Manpower planning and Process re-engineering.
1.3 Suggest ways to position the administrative services in the modern context 
of global integration, emergence of markets and liberalisation.
1.4 To examine if the present system of governance is optimally suited to 
the environment of the times
1.4.1 To suggest a framework for possible areas where there is need for 
governmental regulation (regulators) and those where it should 
be reduced.
1.4.2 To strengthen the framework for efficient, economical, sensitive, 
clean, objective and agile administrative machinery.
1.2 The c ommission in its various Reports has already examined and made recommendations on 
different aspects of governance – transparency in government, public order and anti-terrorism, 
ethics in governance, decentralization and empowerment of local bodies, refurbishing of 
personnel administration, creating citizen centric administration, etc. In the present Report, 
the commission will be analyzing and making recommendations for reforming the structure 
of the Government of India since the sustainability of the other reforms is closely interlinked 
 
 
 
 
 
 
 
 
with the creation of a pro-active, efficient and flexible organizational framework. 
1.3 Most of the structures existing in the government are based on the W eberian model of 
division of work - a well defined hierarchy, adherence to rules and, by and large, impersonal 
functioning. These organizational structures have stood the test of time to a considerable 
extent but are more suited to command and control functions and less so when it comes to 
developmental, promotional and facilitative functions of the s tate. India’s position on various 
key human development and economic parameters remains well below desired levels. In a way 
this is a reflection of the structure and functioning of governmental organizations. 
1.4 The commission is of the view that these structures now need to be redesigned in order 
to make our governance apparatus an instrument of service to the people as well as a tool to 
achieve national objectives in the fields of social and economic development. 
1.5 The c ommission obtained the views of different Ministries/Departments on various 
aspects of their mandate and role as well as their organizational structure and internal 
processes. In addition, the questionnaire on civil services reforms sought to elicit responses 
on aspects like minimizing hierarchical tiers in government, shifting towards a decision 
maker oriented system instead of a hierarchical system and creation of executive agencies. 
The commission had also enlisted the help of the Indian Institute of Public Administration 
(IIPA), New Delhi to prepare a background paper on the existing structure. The commission 
also sought the assistance of management experts in getting an overview of the modern 
concepts in organizational structure. The c ommission organized a series of consultations with 
s ecretaries to the Government of India, members of central and All India s ervices as well as 
eminent retired civil servants. During its visits to the s tates, the commission held detailed 
discussions with s tate Governments, retired civil servants and eminent public personalities. The 
c ommission visited s ingapore, Australia, Thailand, France and the u nited Kingdom and had 
extensive discussions with the authorities there to understand the structure and functioning 
of government in those countries as well as the reform measures undertaken by them. As the 
terms of reference of the commission included Regulatory Reform, the commission held 
deliberations with prominent government regulators, both past and present. 
1.6 Though the Report was finalized in April and printed in May, 2009, the 
c ommission would like to record its appreciation for the contributions made by  
Dr. M V eerappa Moily in arriving at the conclusions. Before resigning from the position of 
c hairman ARc , on 31st March, 2009, Dr. Moily had played an important role in guiding 
the deliberations of the commission in finalizing this Report. 
1.7 The commission would like to place on record its gratitude to Prof. Pradip Khandwalla 
for preparing an analytical report titled ‘Revamping Government of India’s Administration 
for Governance Excellence’ . The commission would like to thank shri s K Das, consultant, 
ARc for providing very useful inputs in drafting this Report. The commission is grateful to  
Dr. P.l. s anjeev Reddy, the then Director, Indian Institute of Public Administration (IIPA) and  
Prof. s ujata s ingh, IIPA for preparing a background paper on the existing structure of 
Government of India. The commission would also like to thank shri Nripendra Mishra, 
c hairman, T elecom Regulatory Authority of India; shri Pradip Baijal, Former c hairman, 
T elecom Regulatory Authority of India; Prof. N.R. Madhava Menon, Member, c ommission on 
centre s tate Relations; shri l . Mansingh, c hairman, Petroleum and Natural Gas Regulatory 
Board; shri Vinod Dhall, Former c hairman, competition commission of India; shri M. 
Damodaran, former c hairman, s EBI; shri Prabodh c hander, Executive Director, Insurance 
Regulatory and Development Authority; s hri c .A. c olaco, Adviser (l egal/Regulatory/Policy), 
T ata Power; Ms. V andana Aggarwal, Director, Planning commission, shri Mani, National 
Highways Authority of India and s hri K M Abraham, s hri s ahoo and their team from s EBI for 
sharing their views on reforms in the Regulatory sector. The c ommission is grateful to Dr. K.P. 
Krishnan, Joint s ecretary, Ministry of Finance, for making a presentation to the commission 
on a comparative analysis of Regulators in different sectors in the country. The commission 
acknowledges with gratitude the very useful suggestions made by eminent persons including 
former civil servants and senior officers of Government of India and s tate Governments. The 
commission is particularly grateful to the dignitaries and officers of the countries visited for 
sharing readily the experience with reforms in their respective countries.
Introduction Organisational s tructure of Government of India
 
2.1.3 India has taken several significant initiatives to improve the quality of governance 
as detailed in our earlier Reports. These include the 73rd and the 74th c onstitutional 
Amendments which aimed to empower the local bodies, the 97th c onstitutional Amendment 
which limited the size of the council of Ministers, the new V alue Added T ax regime and the 
Right to Information Act etc. These indicate that our political system is responding to the 
growing challenges of governance. 
2.1.4 The reasonably swift and efficient response of our administration to a series of major 
natural calamities e.g. the T sunami in December 2004, and the earthquake in Jammu & 
Kashmir - demonstrates that in times of crisis we are able to marshal our resources effectively. 
All these and competent election management show that we have an impressive administrative 
infrastructure and it responds well when objectives are clearly defined, resources are made 
available and accountability is strictly enforced.
2.1.5 However, a lot more remains to be done. There is increasing lawlessness in several pockets 
of the country, and armed groups are resorting to violence with impunity for sectarian or 
ideological reasons. The s tate apparatus is generally perceived to be largely inefficient, with 
many functionaries playing a passive (and safe) role. The bureaucracy is generally seen to be 
tardy, inefficient, and unresponsive. corruption is all-pervasive, eating into the vitals of our 
system, undermining economic growth, distorting competition, and disproportionately hurting 
the poor and marginalized citizens. c riminalization of politics continues unchecked, with 
money and muscle power playing a large role in elections. In general, there is high degree of 
volatility in society on account of poor implementation of laws and programmes and poor 
delivery of public services leading to unfulfilled expectations.
2.1.6 Fulfilment of the human potential and rapid growth are the two fundamental objectives 
of public administration. The ‘non-negotiable’ role of the s tate lies in four broad areas: 
1. Public order, justice and rule of law.
2. Human development through access to good quality education and healthcare 
to every citizen.
3. Infrastructure and sustained natural resource development.
4. s ocial security, especially for the unorganized sector workers.
2.1.7 Propensity to centralize has been the dominant feature of our administration. W e need 
to truly redesign government on the basis of the principle of subsidiarity. A task which can be 
performed by a small, lower unit should never be entrusted to a large, higher unit. 
REORGANISING GOVERNMENT - INTERNATIONAL 
EXPERIENCES
1
2
2.1 Background
2.1.1 Public administration in India faces immense challenges. These include the need to 
maintain peace and harmony, to alleviate deep poverty, to sustain a healthy and inclusive 
economic growth, to ensure social justice and to achieve an ethical, efficient, transparent and 
participative governance. The magnitude of these challenges is evident from India’s ranking 
on various parameters (Box 2.1). 
2.1.2 The sort of public administration 
needed to escalate the growth rate may 
not necessarily be the one that tackles deep 
poverty, seeks to remove inequality, tackles 
corruption, fights criminalization of politics, 
or ensures speedy justice. It is unlikely 
that a single design of the administrative 
machinery will fill all bills. One needs to 
be bold and innovative in designing special 
purpose instrumentalities, some of which 
may apparently be inconsistent with one 
another. For instance, further de-regulation 
may be required to foster economic growth, 
and the s tate may need to withdraw from 
some of the commercial activities that it 
is currently engaged in. At the same time, 
the s tate may need to devise measures to 
more effectively regulate certain sectors 
while pumping more money to improve the 
infrastructure, alleviate poverty and remove 
inequalities. s ome de-regulation can reduce corruption, but other regulations may have to be 
put into place to fight corruption.
Box 2.1 : India’s Ranking on Key Parameters
UN Human Development Report, 2008
From 127 in 2004, India has slipped to 132 in the Human 
Development index, scoring below Equatorial Guinea and 
the s olomon Islands.
IFC/WB Doing Business Report, 2009
India is the most difficult country to enforce contracts in a 
court or otherwise. At 122, it trails Nepal and Bangladesh.
WEF Global Competitiveness Report, 2008
With its inadequate infrastructure, inefficient bureaucracy 
and tight labour laws, India at 50th position, is no match 
for c hina.
Global Corruption Perception Index, 2008
India’s rank has fallen from 72 in 2004 to 85 even as c hina, 
with which it was on par till last year, maintained its position 
at 72.
UNIDO Report, 2009
India, at 54 (down from 51 in 2000), trails c hina by 28 
positions on the competitive Industrial Performance 
Index.
Index of Economic Freedom, 2009
With a shackled judicial system, excessive regulation and a 
“mostly unfree” reputation, India, at 123, trails Gabon.
Source: India Today, April 6, 2009
Reorganising Government - International Experiences  Organisational s tructure of Government of India Reorganising Government - International Experiences  
2.1.8 India is not unique in the challenges and the problems it is facing. A large number of 
other countries have struggled for long to forge effective democratic governance. s ome of 
them have managed to provide welfare facilities, design justice delivery systems and contain 
corruption, pollution and other negative externalities much more successfully than India. 
There is much to learn from them. similarly, many ‘developmental’ s tates have struggled for 
decades to raise the growth rate, improve infrastructure, and rapidly increase social capital 
and alleviate poverty. One can learn a lot from their experiences, too. And, of course, there is 
much to learn from our own experiences.
2.2 Models of Structural Reforms in Government
2
2.2.1 s everal attempts have been made to bring about structural reforms in government. An 
extensive body of literature exists on these attempts. A comparative analysis of these reform 
measures has been carried out by several researchers and academicians. Three models of public 
administration reforms have been distinguished by Romeo B. Ocampo
3
.
i. Reinventing Government was written to map out “a radically new way 
of doing business in the public sector” (Osborne and Gaebler, 1993: 
xviii). According to the authors, reinvention is a “(r)evolutionary change 
process” that had happened before in the Progressive and New Deal 
eras in the U.S. and has been occurring again in local governments 
and elsewhere. Instead of originating the model, they pieced the ideas 
embodied in it from the actual practices of those who have dealt with 
government problems in innovative ways. The model represents a basic, 
“paradigm shift” from the New Deal paradigm of 1930s to 1960s toward 
the “entrepreneurial government” model that they now advocate. In their 
own summary:
Most entrepreneurial governments promote competition 
between service providers. They empower citizens by pushing 
control out of the bureaucracy, into the community. They 
measure the performance of their agencies, focusing not on 
inputs but on outcomes. They are driven by their goals-their 
missions-not by their rules and regulations. They redefine their 
clients as customers and offer them choices… They prevent 
problems before they emerge, rather than simply offering 
services afterward. They put their energies into earning money, 
not simply spending it. They decentralize authority, embracing 
participatory management. They prefer market mechanisms 
to bureaucratic mechanisms. And they focus not simply on 
providing public services, but on catalyzing all sectors-public, 
private, and voluntary-into action to solve their community 
problems (Osborne and Gaebler, 1993: 19-20).
ii. Re-engineering or BPR “is the fundamental rethinking and radical redesign of 
business processes to achieve dramatic improvements in critical contemporary 
measures of performance, such as cost, quality, service, and speed” (Hammer 
and Champy, 1993: 32). It represents an effort to turn back the Industrial 
Revolution and reassemble the tasks and functions taken apart by the 19th 
century principles of the division of labor (Hammer, as cited by Fowler, 1997: 
36-37). According to Fowler, its many features include the following results of 
the desired changes:
(1) Separate, simple tasks are combined into skilled, multi-functional jobs.
(2) The stages in a process are performed in their natural order.
(3) Work is performed where it is best done-some parts of the process may thus 
be outsourced.
(4) The volume of checking and control of separate tasks is reduced.
(5) There is total compatibility between processes, the nature of jobs and  
structure, management methods, and the organization’ s values and beliefs.
(6) IT is recognized and exploited as offering many opportunities for the redesign 
of the work systems and the provision of information to enhance devolved 
decision-making.
(7) Processes may have multiple versions to cope with varying 
circumstances. 
Re-engineering is thus more inward-looking and gives greater attention to 
the role of information technology (IT). BPR has been extensively applied in 
private business, but only to a limited extent in the public sector. However, 
it shares certain areas of concern with reinvention, as indicated by the 
following aims:
(1) Managerial hierarchies and organizational structures are flattened.
Page 5


1 INTRODUCTION
1.1 One of the terms of reference of the Administrative Reforms commission pertains to 
the structure of the Government of India. The commission has been asked to look into the 
following aspects:
1. Organizational Structure of the Government of India 
1.1 Reorganization of Ministries and Departments
1.1.1 Revisiting and redefining the role of the Ministries and 
Departments in the context of evolving role of governance and 
need for greater collaboration.
1.2 Manpower planning and Process re-engineering.
1.3 Suggest ways to position the administrative services in the modern context 
of global integration, emergence of markets and liberalisation.
1.4 To examine if the present system of governance is optimally suited to 
the environment of the times
1.4.1 To suggest a framework for possible areas where there is need for 
governmental regulation (regulators) and those where it should 
be reduced.
1.4.2 To strengthen the framework for efficient, economical, sensitive, 
clean, objective and agile administrative machinery.
1.2 The c ommission in its various Reports has already examined and made recommendations on 
different aspects of governance – transparency in government, public order and anti-terrorism, 
ethics in governance, decentralization and empowerment of local bodies, refurbishing of 
personnel administration, creating citizen centric administration, etc. In the present Report, 
the commission will be analyzing and making recommendations for reforming the structure 
of the Government of India since the sustainability of the other reforms is closely interlinked 
 
 
 
 
 
 
 
 
with the creation of a pro-active, efficient and flexible organizational framework. 
1.3 Most of the structures existing in the government are based on the W eberian model of 
division of work - a well defined hierarchy, adherence to rules and, by and large, impersonal 
functioning. These organizational structures have stood the test of time to a considerable 
extent but are more suited to command and control functions and less so when it comes to 
developmental, promotional and facilitative functions of the s tate. India’s position on various 
key human development and economic parameters remains well below desired levels. In a way 
this is a reflection of the structure and functioning of governmental organizations. 
1.4 The commission is of the view that these structures now need to be redesigned in order 
to make our governance apparatus an instrument of service to the people as well as a tool to 
achieve national objectives in the fields of social and economic development. 
1.5 The c ommission obtained the views of different Ministries/Departments on various 
aspects of their mandate and role as well as their organizational structure and internal 
processes. In addition, the questionnaire on civil services reforms sought to elicit responses 
on aspects like minimizing hierarchical tiers in government, shifting towards a decision 
maker oriented system instead of a hierarchical system and creation of executive agencies. 
The commission had also enlisted the help of the Indian Institute of Public Administration 
(IIPA), New Delhi to prepare a background paper on the existing structure. The commission 
also sought the assistance of management experts in getting an overview of the modern 
concepts in organizational structure. The c ommission organized a series of consultations with 
s ecretaries to the Government of India, members of central and All India s ervices as well as 
eminent retired civil servants. During its visits to the s tates, the commission held detailed 
discussions with s tate Governments, retired civil servants and eminent public personalities. The 
c ommission visited s ingapore, Australia, Thailand, France and the u nited Kingdom and had 
extensive discussions with the authorities there to understand the structure and functioning 
of government in those countries as well as the reform measures undertaken by them. As the 
terms of reference of the commission included Regulatory Reform, the commission held 
deliberations with prominent government regulators, both past and present. 
1.6 Though the Report was finalized in April and printed in May, 2009, the 
c ommission would like to record its appreciation for the contributions made by  
Dr. M V eerappa Moily in arriving at the conclusions. Before resigning from the position of 
c hairman ARc , on 31st March, 2009, Dr. Moily had played an important role in guiding 
the deliberations of the commission in finalizing this Report. 
1.7 The commission would like to place on record its gratitude to Prof. Pradip Khandwalla 
for preparing an analytical report titled ‘Revamping Government of India’s Administration 
for Governance Excellence’ . The commission would like to thank shri s K Das, consultant, 
ARc for providing very useful inputs in drafting this Report. The commission is grateful to  
Dr. P.l. s anjeev Reddy, the then Director, Indian Institute of Public Administration (IIPA) and  
Prof. s ujata s ingh, IIPA for preparing a background paper on the existing structure of 
Government of India. The commission would also like to thank shri Nripendra Mishra, 
c hairman, T elecom Regulatory Authority of India; shri Pradip Baijal, Former c hairman, 
T elecom Regulatory Authority of India; Prof. N.R. Madhava Menon, Member, c ommission on 
centre s tate Relations; shri l . Mansingh, c hairman, Petroleum and Natural Gas Regulatory 
Board; shri Vinod Dhall, Former c hairman, competition commission of India; shri M. 
Damodaran, former c hairman, s EBI; shri Prabodh c hander, Executive Director, Insurance 
Regulatory and Development Authority; s hri c .A. c olaco, Adviser (l egal/Regulatory/Policy), 
T ata Power; Ms. V andana Aggarwal, Director, Planning commission, shri Mani, National 
Highways Authority of India and s hri K M Abraham, s hri s ahoo and their team from s EBI for 
sharing their views on reforms in the Regulatory sector. The c ommission is grateful to Dr. K.P. 
Krishnan, Joint s ecretary, Ministry of Finance, for making a presentation to the commission 
on a comparative analysis of Regulators in different sectors in the country. The commission 
acknowledges with gratitude the very useful suggestions made by eminent persons including 
former civil servants and senior officers of Government of India and s tate Governments. The 
commission is particularly grateful to the dignitaries and officers of the countries visited for 
sharing readily the experience with reforms in their respective countries.
Introduction Organisational s tructure of Government of India
 
2.1.3 India has taken several significant initiatives to improve the quality of governance 
as detailed in our earlier Reports. These include the 73rd and the 74th c onstitutional 
Amendments which aimed to empower the local bodies, the 97th c onstitutional Amendment 
which limited the size of the council of Ministers, the new V alue Added T ax regime and the 
Right to Information Act etc. These indicate that our political system is responding to the 
growing challenges of governance. 
2.1.4 The reasonably swift and efficient response of our administration to a series of major 
natural calamities e.g. the T sunami in December 2004, and the earthquake in Jammu & 
Kashmir - demonstrates that in times of crisis we are able to marshal our resources effectively. 
All these and competent election management show that we have an impressive administrative 
infrastructure and it responds well when objectives are clearly defined, resources are made 
available and accountability is strictly enforced.
2.1.5 However, a lot more remains to be done. There is increasing lawlessness in several pockets 
of the country, and armed groups are resorting to violence with impunity for sectarian or 
ideological reasons. The s tate apparatus is generally perceived to be largely inefficient, with 
many functionaries playing a passive (and safe) role. The bureaucracy is generally seen to be 
tardy, inefficient, and unresponsive. corruption is all-pervasive, eating into the vitals of our 
system, undermining economic growth, distorting competition, and disproportionately hurting 
the poor and marginalized citizens. c riminalization of politics continues unchecked, with 
money and muscle power playing a large role in elections. In general, there is high degree of 
volatility in society on account of poor implementation of laws and programmes and poor 
delivery of public services leading to unfulfilled expectations.
2.1.6 Fulfilment of the human potential and rapid growth are the two fundamental objectives 
of public administration. The ‘non-negotiable’ role of the s tate lies in four broad areas: 
1. Public order, justice and rule of law.
2. Human development through access to good quality education and healthcare 
to every citizen.
3. Infrastructure and sustained natural resource development.
4. s ocial security, especially for the unorganized sector workers.
2.1.7 Propensity to centralize has been the dominant feature of our administration. W e need 
to truly redesign government on the basis of the principle of subsidiarity. A task which can be 
performed by a small, lower unit should never be entrusted to a large, higher unit. 
REORGANISING GOVERNMENT - INTERNATIONAL 
EXPERIENCES
1
2
2.1 Background
2.1.1 Public administration in India faces immense challenges. These include the need to 
maintain peace and harmony, to alleviate deep poverty, to sustain a healthy and inclusive 
economic growth, to ensure social justice and to achieve an ethical, efficient, transparent and 
participative governance. The magnitude of these challenges is evident from India’s ranking 
on various parameters (Box 2.1). 
2.1.2 The sort of public administration 
needed to escalate the growth rate may 
not necessarily be the one that tackles deep 
poverty, seeks to remove inequality, tackles 
corruption, fights criminalization of politics, 
or ensures speedy justice. It is unlikely 
that a single design of the administrative 
machinery will fill all bills. One needs to 
be bold and innovative in designing special 
purpose instrumentalities, some of which 
may apparently be inconsistent with one 
another. For instance, further de-regulation 
may be required to foster economic growth, 
and the s tate may need to withdraw from 
some of the commercial activities that it 
is currently engaged in. At the same time, 
the s tate may need to devise measures to 
more effectively regulate certain sectors 
while pumping more money to improve the 
infrastructure, alleviate poverty and remove 
inequalities. s ome de-regulation can reduce corruption, but other regulations may have to be 
put into place to fight corruption.
Box 2.1 : India’s Ranking on Key Parameters
UN Human Development Report, 2008
From 127 in 2004, India has slipped to 132 in the Human 
Development index, scoring below Equatorial Guinea and 
the s olomon Islands.
IFC/WB Doing Business Report, 2009
India is the most difficult country to enforce contracts in a 
court or otherwise. At 122, it trails Nepal and Bangladesh.
WEF Global Competitiveness Report, 2008
With its inadequate infrastructure, inefficient bureaucracy 
and tight labour laws, India at 50th position, is no match 
for c hina.
Global Corruption Perception Index, 2008
India’s rank has fallen from 72 in 2004 to 85 even as c hina, 
with which it was on par till last year, maintained its position 
at 72.
UNIDO Report, 2009
India, at 54 (down from 51 in 2000), trails c hina by 28 
positions on the competitive Industrial Performance 
Index.
Index of Economic Freedom, 2009
With a shackled judicial system, excessive regulation and a 
“mostly unfree” reputation, India, at 123, trails Gabon.
Source: India Today, April 6, 2009
Reorganising Government - International Experiences  Organisational s tructure of Government of India Reorganising Government - International Experiences  
2.1.8 India is not unique in the challenges and the problems it is facing. A large number of 
other countries have struggled for long to forge effective democratic governance. s ome of 
them have managed to provide welfare facilities, design justice delivery systems and contain 
corruption, pollution and other negative externalities much more successfully than India. 
There is much to learn from them. similarly, many ‘developmental’ s tates have struggled for 
decades to raise the growth rate, improve infrastructure, and rapidly increase social capital 
and alleviate poverty. One can learn a lot from their experiences, too. And, of course, there is 
much to learn from our own experiences.
2.2 Models of Structural Reforms in Government
2
2.2.1 s everal attempts have been made to bring about structural reforms in government. An 
extensive body of literature exists on these attempts. A comparative analysis of these reform 
measures has been carried out by several researchers and academicians. Three models of public 
administration reforms have been distinguished by Romeo B. Ocampo
3
.
i. Reinventing Government was written to map out “a radically new way 
of doing business in the public sector” (Osborne and Gaebler, 1993: 
xviii). According to the authors, reinvention is a “(r)evolutionary change 
process” that had happened before in the Progressive and New Deal 
eras in the U.S. and has been occurring again in local governments 
and elsewhere. Instead of originating the model, they pieced the ideas 
embodied in it from the actual practices of those who have dealt with 
government problems in innovative ways. The model represents a basic, 
“paradigm shift” from the New Deal paradigm of 1930s to 1960s toward 
the “entrepreneurial government” model that they now advocate. In their 
own summary:
Most entrepreneurial governments promote competition 
between service providers. They empower citizens by pushing 
control out of the bureaucracy, into the community. They 
measure the performance of their agencies, focusing not on 
inputs but on outcomes. They are driven by their goals-their 
missions-not by their rules and regulations. They redefine their 
clients as customers and offer them choices… They prevent 
problems before they emerge, rather than simply offering 
services afterward. They put their energies into earning money, 
not simply spending it. They decentralize authority, embracing 
participatory management. They prefer market mechanisms 
to bureaucratic mechanisms. And they focus not simply on 
providing public services, but on catalyzing all sectors-public, 
private, and voluntary-into action to solve their community 
problems (Osborne and Gaebler, 1993: 19-20).
ii. Re-engineering or BPR “is the fundamental rethinking and radical redesign of 
business processes to achieve dramatic improvements in critical contemporary 
measures of performance, such as cost, quality, service, and speed” (Hammer 
and Champy, 1993: 32). It represents an effort to turn back the Industrial 
Revolution and reassemble the tasks and functions taken apart by the 19th 
century principles of the division of labor (Hammer, as cited by Fowler, 1997: 
36-37). According to Fowler, its many features include the following results of 
the desired changes:
(1) Separate, simple tasks are combined into skilled, multi-functional jobs.
(2) The stages in a process are performed in their natural order.
(3) Work is performed where it is best done-some parts of the process may thus 
be outsourced.
(4) The volume of checking and control of separate tasks is reduced.
(5) There is total compatibility between processes, the nature of jobs and  
structure, management methods, and the organization’ s values and beliefs.
(6) IT is recognized and exploited as offering many opportunities for the redesign 
of the work systems and the provision of information to enhance devolved 
decision-making.
(7) Processes may have multiple versions to cope with varying 
circumstances. 
Re-engineering is thus more inward-looking and gives greater attention to 
the role of information technology (IT). BPR has been extensively applied in 
private business, but only to a limited extent in the public sector. However, 
it shares certain areas of concern with reinvention, as indicated by the 
following aims:
(1) Managerial hierarchies and organizational structures are flattened.
Organisational s tructure of Government of India Reorganising Government - International Experiences  
(2) Rewards are given for the achievement of results, not simply for 
activity.
(3) Work units (i.e., sections or departments) change from functional 
units to become process (often “case”) teams.
(4) Customers have a single point of contact with the organization.
iii. New Public Management (NPM) is “shorthand for a group of administrative 
doctrines” in the reform agenda of several OECD countries starting in the 1970s. 
According to the OECD (Kickert, 1997: 733), “a new paradigm for public 
management” had emerged, with eight characteristic “trends” (listed below in 
modified order, to range from internal to external concerns):
(1) strengthening steering functions at the center;
(2)  devolving authority, providing flexibility;
(3) ensuring performance, control, accountability;
(4) improving the management of human resources;
(5) optimizing information technology;
(6) developing competition and choice;
(7) improving the quality of regulation; and
(8) providing responsive service.
2.2.2 The commission has already examined the business process re-engineering concept in 
detail in the Indian context in its Reports on e-Governance and c itizen c entric Administration. 
As NPM is in many ways a derivative of the reinvention model, the c ommission has examined 
its features in various countries such as the u K, us A, Thailand, Australia etc.
2.3 Origins of NPM 
2.3.1 New Public Management (NPM) – has also been called market-based public 
administration, managerialism, reinventing government, and post-bureaucratic model. It 
evolved in Britain and the us, and later spread to most of the affluent liberal W estern c ountries 
and also to several developing countries like Ghana, Malaysia, Thailand, and Bangladesh. Its 
initial growth can be traced to the relatively minimalist, non-interventionist state ideology of 
the late 1970s and early 1980s, but the basic approach of NPM was later adopted by a number 
of countries that did not necessarily share this ideology. NPM sought to bring management 
professionalism to the public sector without necessarily discarding the active role and welfare 
goals of the s tate. NPM also offered the possibility of a more cost-effective and citizen-friendly 
s tate, and the possibility of substantially enhancing the governance capacity of the s tate for 
tackling the highly complex challenges of our times. 
2.3.2 Ambit of NPM
2.3.2.1 s arker has enumerated the salient features of NPM (s arker, 2006, p. 182; op. cit., 
Khandwalla) as follows:
? A shift from focus on inputs and procedures alone to include outputs 
and outcomes.
? Shift towards greater measurement in terms of standards, performance indicators 
etc.
? Preference for ‘lean’ , flat’ specialised and autonomous organizational forms such 
as executive agencies.
? Widespread substitution of hierarchical relations by contractual relations both 
inside government organizations and between government bodies and outside 
entities.
? Much greater use of market or market-like mechanisms for delivering public 
services, such as through partial or full privatization, outsourcing, and the 
development of internal markets.
? Much greater public sector-private sector/civil society partnerships and the use of 
hybrid organizations.
? Much stronger emphasis on efficiency and individual initiative.
? Greater ability to discharge government functions effectively (in terms 
of public policies) and equitably.
2.3.2.2 siddiquee has added the following additional features (siddiquee, 2006, pp. 340-1; 
op. cit., Khandwalla):