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July 06, 2011

Performance Monitoring and Evaluation System in India

Posted by Tej Prakash

Dr. Prajapati Trivedi, Secretary to the Government of India in the Cabinet Secretariat, gave a presentation, for FAD, on Performance Monitoring and Evaluation System (PMES) in India. Dr. Trivedi heads this initiative.

The Government of India has made major investments in social services in recent years. These include a rural employment guarantee scheme, a health for all program and a major initiative in literacy and education. At the same time, more schemes are being considered for implementation including a very ambitious ‘food security’ scheme. Most of these schemes have been designed with an input oriented approach, with weak performance management systems.

The PMES initiative, started in 2009, seeks to strengthen performance in the delivery of budgetary objectives. The main objectives of this scheme are to articulate outputs (and where possible, outcomes) of schemes managed by the ministries and departments, evaluate their performance and to hold them accountable for it. Some of the salient features of the scheme are the following:

  • Each ministry/department shall prepare a Results Framework Document (RFD) for the tasks allocated to it. RFD consists of the entity’s vision, mission, priorities and functions. It also details specific results to be achieved. An external committee of subject area experts for each department/ministry examine and approve RFD of different departments.
  • It determines priorities among key objectives, success indicators and targets. It describes the performance indicators and measurement methodology.
  • It describes actions for achieving the objectives.
  • It also specifies performance requirements from other departments that are critical for delivering agreed results.
  • For each action, departments specify one or more performance indicators.

At the end of the year, achievements of the departments are evaluated against the indicators, and each department is given a performance evaluation score. This enables a cross departmental comparison.

In the first phase of introduction of PMES (January 1-March 31, 2011), 59 departments were selected for a pilot. The results of the pilot departments were available by end-May of this year and were submitted to the High Power Committee on government performance.

One interesting feature of PMES is the incentive system supporting it. These are cash incentives and are to be given to high performing departments for all staff in the department. PMES is planned to be extended to almost all the departments of the government (with the exception of a few departments like defense and foreign affairs). The government is also developing a software to implement all aspects of RFD.

This is a very significant development for many reasons. First, meaningful performance management had so far been almost absent in India and this initiative is the first significant attempt to measure, monitor, evaluate, and reward performance. Second, it shifts the focus from input to performance. Finally, and more importantly, it changes the incentive system in the civil service.

Some further steps need to be taken to strengthen the PMES framework

One of most important missing pieces is lack of ‘personal accountability’ for delivering results. While an incentive system has been started, there is no penalty for lack of performance. The RFD framework which is an agreement between the minister and the Secretary of the department is driven by the civil service and is likely to lack rigor of a ‘hands off’ contract between the two. The average tenure of a Secretary of the government of India is 18 months. Unless a deliverable begins and ends (is co terminus) within this period, there cannot be personal accountability. The terms of appointment of the senior civil service will need to change to a fixed term with a contract for firm deliverables in that period.

Meaningful performance management also needs other underpinnings. These include a multidimensional programmatic budget classification system that is harmonized with organizational entities so that operational responsibility is clear; a system of accounts so that all expenditure can be allocated to an objective not only where cash has been paid but also where expenditure has been incurred; and a costing system so that the baseline is clear and realistic. It also involves greater devolution of authority to the managers and a system to ensure oversight. In India most programs are implemented in more than 265000 local level governments (Panchayats) in more than 600 districts, harmonization of operational systems (budget, accounting) at all levels is critical. A number of important initiatives are underway. These include budget classification reform, accounting standards reform, a monitoring system to track flow of money to the local levels. All these initiatives should be brought within abroad conceptual framework so that these do not remain isolated items but contribute to the end result of improved performance.

Note: The posts on the IMF PFM Blog should not be reported as representing the views of the IMF. The views expressed are those of the authors and do not necessarily represent those of the IMF or IMF policy.

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Comments

Sounds good!

One of the key issues in the rural development in India is the empowering the rural local bodies and creating mangerial capacity therein. The second is the allowing the convergence of various development schemes and programs at the local level; so as to allow the synegry and pooling of resource at any given time (without actually alterning the final resource allocations. This need-based inter and intra-programs resource transfers, will allow the local bodies to have the leverage of smooth resource utilization.

I am not too sure about the approach of cash incentives to all staffs of the 'performing departments'; this may even allow the dead woods to take the piggy rides.

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