As per the recently released report of the Economic Advisory Council to the Prime Minister (EAC-PM), there is an urgent need to limit the size of the government in India. Do you agree?

Case in support of limiting the government

1. Reduce spending on salary and pensions → more for welfare under Article 38

2. Promote the fiscal discipline via less devolution → at all levels government shrink.

3. Promote capital expenditure

   • Crowd in private investment
   • Generate more jobs
   • Economic growth to $5 trillion.

4. Promote more faster decision making → reduce red tapism.

5. Promote the ease of doing business due to less hindrances in government

However, reducing the government size is not the panacea as →

1. Promotes centralization of power → against principle of subsidiarity
2. Stifles expertise in governance as same officer manges multiple fields.
3. Loopholes in policy possible as less brains ponder over it. Eg: seen with fodder policy of Bihar
4. Stifles innovation due to lack of conflicting ideas.
5. Below a critical number can lead to loss of accountability hierarchy.

Way ahead

1. Adopt flatter structure and have only few posts and levels. Eg: CAG office abolished Section officer.
2. Determine via calculation the critical limit for each department.
3. Diversify the areas of expertise - hire generalists for flatter government
4. Lateral entry more to uphold the value of time based experts. → only limited duration → no pension
5. Uphold principle of subsidiarity → build local capacity.