Unit-I Public Systems Management Unit-I - Introduction
Unit-I Public Systems Management Unit-I - Introduction
Unit-I Public Systems Management Unit-I - Introduction
INTRODUCTION:
Public administration both as a practice and a discipline is undergoing change in view of
contemporary global developments in the socio-economic arena. The current globalization
trends have led to a rethinking about the role of the State and government. Approaches to public
administration are also embedded in wider conceptions of the State, the relationship between State,
market and civil society. The market model of governance has been emerging since 1980s. Public
administrators are now viewed by many as entrepreneurial managers whose job is to attain cost
effectiveness. They are expected to be more entrepreneurial and result-focused. In this context, the
concept of public systems has added a new dimension to the structure and system of working of
public administration. Public systems management is a developing theme lending a new
dimension to the discipline of public administration. In this Unit, an attempt is made to explore
the evolution, nature, scope and characteristics of Public Systems Management (PSM).
Public system is broad term encompassing the constitutional, legal, institutional and
conventional arrangements by which, the country is governed, and especially the means by which the
policies of the Government are formulated, and then implemented by State sector organizations, and
the means by which those organizations are governed, funded, managed and monitored.
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A system, according to Gore and Stubbe (1994), is a “combination of resources working
together to convert inputs into outputs”. Every organisation comprises systems with certain
goals to fulfil, converting inputs into provision of goods and services. For example, it can be
personnel, finance, logistics, marketing systems and so on. Public systems management, broadly
speaking, comprises several sub-systems operating in the public arena. Each of the sub-systems
aims at achieving certain prescribed goals through utilisation of resources – human, financial
and material. Public systems management operates within a broad framework of rules, regulations,
catering to the needs of the public and making use of public finance.
The public domain or system has certain distinct characteristics and functions to
discharge and operates within a prescribed framework. Hence it cannot totally accept the private
sector principles and styles of operation. As we have discussed, globalisation over the past twenty
years, had a significant impact on public systems. The neo liberal views, public choice perspective
have resulted in the roll back of the State from key areas, and led to quasi markets, separation of
policy from execution, professional administration, etc. Public systems, still, function within the
domain of State, law, and politics and pursue the public interest. Attempts to equate business and
public administration, under the name of public management reform, signify conservative
mistakes of not distinguishing the different logics that govern the private and public realms. Public
management reforms draw inspiration from business management where decision-making
autonomy is enjoyed by the managers of companies. Nevertheless, the difference between public
administration and business administration, derived from the different nature of private and public
organisations, needs to be made clear. There are two basic differences. First, the business
organisation has definite owners and seeks profit, while the public organisation belongs to everyone
and pursues the public interest. Second, the private company is governed or coordinated by the
market, which falls within the scope of economic theory, while the State particularly the
democratic State goes by the logic of democratic politics, which is analysed by political science
and public law (Pereira, 2004, emphasis added).
Public systems management, it can be said is concerned with the designing and
operation of public services and the functioning of executive government. This sort of a reform
attempt of State bureaucracies seeks to make government more ‘business like’ providing a
prominent role for bureaucrats as managers.
SCOPE OF PSM:
Contemporary governments are attempting to be performance-oriented. Therefore,
management of government needs to be deregulated. The nature of public agencies must be
entrepreneurial, mission-driven, and service-oriented. Public systems managers are to be risk-
takers who invite participation of other kindred organisations for partnering and reward
performance. In this scenario, the scope of public systems management is confined to following
areas of governance:
Focusing on achieving results rather than primarily conforming with processes
Introducing market principles such as competition, contracting out in the provision of
goods and services
Making public administration customer-driven to enhance service ethic and efficiency
Assigning the role of steering activities to the government rather than rowing, relying on
third parties such as non-profit organisations, other levels of government in implementation
of policies
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Deregulating the government activities to make it result-oriented
Empowering the employees to serve the customers as it promotes teamwork
Changing the overall public administrative culture towards flexibility, innovation,
entrepreneurialism, as ‘opposed to’ rule-bound, process orientation and focusing on inputs
rather than results; and
A new entrepreneurial, user-oriented culture is being created in public systems, with
emphasis on performance measurement, autonomy to organisation and freedom to
individuals.
Kettle (2002), points out certain basic concerns that the New Public Management initiatives
address. These include:
Productivity
How can governments produce more services with less tax money?
Marketisation
How can governments use market – style incentives to root out the pathologies of government
bureaucracy?
Service orientation
How can governments better connect with citizens to make programmes more responsive to the
needs of the citizen?
Decentralisation
How can governments make programmes more responsive and effective by shifting programmes to
lower levels of government or shifting responsibility within public agencies to give front line
managers greater incentive and ability to respond to the needs of citizens?
Policy
How can governments improve capacity to devise and track policy?
India adopted planned economic development where the State and private capital were required
to actively participate in accelerating the development process. Immediately after independence, the
Government of India announced its Industrial Policy in April 1948. The aim was to have a mixed
economy where Public Sector and Private Sector were expected to operate side by side. In pursuance
of this, industries were classified into four categories as follows:
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• Exclusive monopoly in Arms and Ammunition, Atomic Energy and Railway Transport;
• Government controlled new undertakings in Coal, Iron and Steel, Telephone, Telegraph,
Aircraft, and Shipbuilding, etc.;
• Basic consumer and capital goods industries under State Regulation and Control; and
• Other industries under co-operative and private enterprise. This Policy also underlined the
role of cottage and small industries and of foreign capital in industrializing the Indian
economy.
This policy remained in operation for eight years but could make little impact on the industrial
scene of the country because the First Five year plan was modest, especially with regard to
investment in the Industrial Sector.
In April 1956, the Government of India announced a new Industrial Policy which was
necessitated by certain important economic and political development in the country; the adoption of
constitution of India in 1950 enunciating the Directive Principles of State Policy; the successful
completion of the First Five Year Plan; the acceptance by the Parliament of the Socialist Pattern of
Society in December 1954; and the launching of the Second Five Year Plan with emphasis on
industrialization.
The industrial policy resolution laid down the following objectives of the Industrial Policy,
which have since been incorporated in all the Five Year Plans of the country.
• To speed up industrialization;
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• To build co-operative sector;
• To develop and build new undertakings and set up new transport facilities by the State.
In pursuance of these objectives industries were classified into three categories as follows:
1. First 17 industries were kept in Schedule A. These are the exclusive responsibility of the
State. They included Arms and Ammunition, Atomic Energy, Iron & Steel, Heavy
Machineries, Coal, Oil, Power, Rail Transport, etc.
2. Second 12 industries were kept in Schedule B. These would be progressively State owned
and the Private Sector will also supplement the effort of the State either singly or with State
participation. They included Aluminum and other Non-Ferrous Metals, Chemicals, Drugs,
Pharmaceuticals, Fertilizer, Road and Sea Transport, etc.
3. Development of all the remaining industries in schedule C was left to the initiative and
enterprise of the private sector.
It could be observed from above that the Indian Parliament resolved to maintain exclusive
monopoly of the State in respect of development of the following Public Systems:
1. Rail Transport
2. Road Transport
3. Water Transport
4. Air Transport
In accordance with the industrial policy resolutions 1956 the task to build a Cooperative Sector
was incorporated in all the Five Year Plans for fulfillment. Before constitutional amendment of 1976,
education was the exclusive responsibility of the States. The constitutional amendment as above
included education in the concurrent list. Public Health remained the responsibility of the State. Thus
at independence in 1947, Public Systems in India were the exclusive monopoly of the Government.
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PUBLIC SYSTEMS MANAGEMENT: NATURE
Over the years, different forms of political and administrative systems and methods of
governance have been focusing on the ways to reconcile the interests of the citizens with that of
the role of the State. The emergence of the concept of public systems management in public
administration has added a new dimension to the whole issue of governance. Public systems
management has been considered by many as “administration and management of both direct and
indirect institutions engaged in the public policy making exercise and in delivery of public
services”. It is a style of management, which emphasises output targets, limited term contracts,
monetary incentives and freedom to manage. The focus of the PSM is on results, efficiency and
measurement. It brings the following changes in the functioning of public organisations viz.
i) There is a greater flexibility in tailoring the organisation to circumstance, instead of
necessarily following a rigid Weberian model
ii) The focus is on results.
iii) Greater attention is paid to strategic planning
iv) Private sector personnel practices have been adopted such as paying more for good
performance or less for poor performance.
PSM propagates managerial pursuits in governance, with a focus upon the following:
Steering role of the government instead of direct provision
Concern on results and outcomes
Orientation to the needs of customers, and
Use of market mechanisms in those activities of public sector which cannot be privatised.
Public policy is the principled guide to action taken by the administrative executive
branches of the state with regard to a class of issues, in a manner consistent with law and institutional
customs. Public policy is the means by which a government maintains order or addresses the needs of
its citizens through actions defined by its constitution. If this definition sounds vague or confusing, it's
likely because a public policy is generally not a tangible thing but rather is a term used to describe a
collection of laws, mandates, or regulations established through a political process.
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PUBLIC POLICY PROCESS
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1.Agenda Building :
1. Pollution Control
1. Dangerous Smog
2. Oil Spill
Dramatic Crisis Agenda
3. Nuclear Secrets Leak
4. Natural Calamities
1. Plant Closings
2. Cost of Govt. Regulations
Political Leadership Agenda
Ex.US-China trade sanctions on
nuclear issues
A. Policy Agenda
1. All problems that exist in society do not transform into political issues
2. All issues do not produce policies
3. All policies do not invite implementation
4. All implementations do not affect the society in the manner intended
5. There is a limited amount of time, money and personnel to handle policy
problems and issues must compete for a position in the agenda
2. Orientation to time differs from culture to culture in ways that influence the
perception of problems. Ex. Capitalist society identifies its friends and enemies
differently than socialist one
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B. Measuring the Symptoms / Extent of Problems
Crime Statistics
Unemployment
Breakdown of Law and Order
Racial Discrimination
Poverty
Inadequate Educational System
Wars / Military Actions (Ex. Russia Vs. US Missile Defense System)
A. Public Opinion
The fundamental “Law of the land” limits the public’s influence on making policy –
Public Interest
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3. Fiscal Policy – Govt.’s borrowing and taxation
4. Regulatory Policies of FIs (Financial Institutions)
A. Communication Gap
Communication is often inadequate
Unclear Transmission of message
No Clarity – vagueness in policies
Inconsistency
Insufficient Resources, information and personnel
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CENTRE-STATE RELATIONS
Indian constitution defines the power distribution between the federal government (the Centre)
and the States in India. This part is divided between legislative and administrative powers. The
legislative section is divided into three lists: Union list, States list and Concurrent list (Wikipedia,
2011).
The power of the states and the Centre are defined by the constitution and the legislative powers
are divided into three lists.
Union List
Union list consists of 99 items on which the parliament has exclusive power to legislate with
including: defense, armed forces, arms and ammunition, atomic energy, foreign affairs, war and
peace, citizenship, extradition, railways, shipping and navigation, airways, posts and telegraphs,
telephones, wireless and broadcasting, currency, foreign trade, inter-state trade and commerce,
banking, insurance, control of industries, regulation and development of mines, mineral and oil
resources, elections, audit of Government accounts, constitution and organization of the Supreme
Court, High Courts and union public service commission, income tax, custom duties and export
duties, duties of excise, corporation tax, taxes on capital value of assets, estate duty, terminal taxes.
(Wikipedia, 2013)
State List
The state list consists of 61 items and individual states have exclusive authority to legislate on items
included in this list: Public order, police, administration of justice, prisons, local government, public
health and sanitation, agriculture, animal husbandry, water supplies and irrigation, land rights,
forests, fisheries, money lending, state public services and state Public Service Commission, land
revenue, taxes on agricultural income, taxes on lands on buildings, estate duty, taxes on electricity,
taxes on vehicles, taxes on luxuries. (Wikipedia, 2013)
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Concurrent List
Concurrent list consists of 52 items. Uniformity is desirable but not essential on items in this list:
Marriage and divorce, transfer of property other than agricultural land, education, contracts,
bankruptcy and insolvency, trustees and trusts, civil procedure, contempt of court, adulteration of
foodstuffs, drugs and poisons, economic and social planning, trade unions, labour welfare,
electricity, newspapers, books and printing press, stamp duties. (Wikipedia, 2013)
Exceptions
Though states have exclusive powers to legislate with regards to items on the states list, articles
249, 250, 252, and 253 state situations in which the federal government can legislate on these
items.[2]
Administrative Powers
The Union and states have independent executive staffs fully controlled by respected governments
and executive power of the states and the Centre are extended on issues they are empowered to
legislate.
Conclusion:
Tendency towards high degree of centralization
Different political parties may have different political programs leading to
conflicts
Reservation of bills for the President by State Governor may lead to conflict
center-state relations
V) Power of Adjudication:
Parliament can adjudicate on inter-state water or River issues
iii) Taxes levied by the Union Govt. but collected and appropriated by the States:
Stamp duties on Bills of Exchange, Cheques, Promissory Notes, Bills of
Lading, Letters of Credit,
Policies of Insurance,
Transfer of Shares
iv) Taxes levied and collected by the Union Govt. but assigned to States:
Duties on succession of property
Taxes on railway freight and fares
Taxes on transaction in stock exchanges and commodity market
Newspapers, advertisements
v) Taxes levied and collected by the Union Govt. but shared with States:
Grants-in-Aid:
Power of Borrowing:
Union Govt. Can borrow within and outside upon the security of revenues
States can borrow within the country
Financial emergency:
During financial emergencies, the president can suspend the the provision of division
of financial resources between the Union and States and Grantsin-Aid to States
The Union Govt. Acquires right to issue directions to States on
- Reduction of Salary and Allowances, including High Court Judges
- Reserve all money Bills passed by State Legislatures
Areas of Conflict:
Many States complain untimely release of funds
Release of funds depends on the audit of accounts which is dependent on central Govt.
Central assistance for central schemes is communicated late – leads to delay in
implementation of schemes
Centrally sponsored schemes impose conditions – some are difficult ones
Procedural requirements delay release of funds
4. Planning and Centre-State Relations (Articles 245 – 254 in the Constitution of India)
India adopted Economic Planning after Independence to achieve maximum
development
Planning Commission plays important role in Centre-State Relations
Almost in every activity of States, Planning Commission involves for State Plans
(including State List Subjects)
Planning Commission:
i) fixes the size & priorities for the State Plans
ii) mobilizes the physical and financial resources
iii) reduces inter-state disparities in development
iv) ensures uniform rate of economic growth and social development in States
REGIONAL DISPUTES
Regional disputes are bound to arise in a vast country of more than 120 crore population:
Reasons:
1. Secularism & Democracy: leading to practice any religion and float new political
parties
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3. Imbalanced Regional Development:
a. Industrially well-developed states versus others
b. Public welfare schemes – better in South India
c. Concentration of I.T. and Automobile Industries
d. Literacy levels
b. Power Politics: New & existing leaders desperately look to get political power
and in this process promoting regional cultural issues such as language – Marathi
&Tamil
6. International Conflicts:
a. Border issues with China and Pakistan – lead to permanent internal
conflicts in North Eastern States and Jammu Kashmir
b. LTTE & Tamilnadu’s support for Tamils’ cause
7. International Terrorism:
a. Internal ideological and physical support
b. Internationally uneven development of nations lead poor people to turn to religious
fanatics
8. Scare Natural Resources: Water, Minerals etc
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It follows from above that management of Public Systems requires specialized competence for
its social acceptance and commercial viability.
The Public System is basically a service provider industry. To make such services customer
friendly and socially acceptable; the price and quality should be acceptable to the users. The services
offered should be safe, secured, and reliable for its acceptance by the society. Reliability of a product
and/or services originates from quality. These criteria demand innovation in Public Systems
Management (PSM). The products are required to be suitably designed for all market segments for
satisfaction of respective customers.
This is also likely to maximize revenue collection within administered prices. Quality, safety
and security of services lead to reliability. Reliable services demand use of field tested proven
technology in designing and building the infrastructure and its regular and scientific maintenance.
The number of users of a Public System normally increases with time. When a Public System is first
made available for public use, the masses generally takes time to use such new facility changing their
earlier habits and behaviour pattern. However, with passage of time such behavioural pattern
gradually changes and the people start using the new Public System.
In the premises of such consumer behaviour pattern, the capacity of the newly constructed
Public System and its efficiency gradually reduces over time because of depreciation arising out of
seasonal climate changes, even if the facilities remained unused or partially used. In absence of a
scientific maintenance management, the capacity and reliability of services from such Public
Systems deteriorate rapidly when people get accustomed to use such services. Thus maintenance, up-
keep, modernization and innovation are essential for PSM.
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