A New Approach to Public Sector Hiring in India for Improved Service Delivery

This paper argues that the current structure of the public-sector labor markets in India severely limits the ability of the Indian state to effectively deliver services across a wide variety of core functions including policing, education, health care, and public health. Sources of inefficiency include: too few front-line employees, caused in part by entry-level salaries that are too high; lifetime jobs offered without assessing candidate fit for the position; ineffective training and skilling; inadequate rewards for performance; and spatial mismatch between population needs and employees’ preferred work locations. I propose a new approach to hiring front-line service providers to address these issues. The key idea is to introduce three- to five-year-apprenticeships for entry-level service providers, giving priority to local candidates, and interspersing modular training and certification of skills that are consistent with the new National Skills Framework. Hiring into regular full-time positions will be unchanged for the most part, but (performance-linked) credit will be provided for each successful year as an apprentice. One-time exit payments will be made to apprentices who do not get selected for regular positions. I illustrate this approach with several examples, and argue that such an approach can improve the quantity and quality of front-line service providers, in a fiscally feasible way. Additional benefits include reducing youth unemployment, improving their skills, and increasing female labor force participation and empowerment. Since most front-line service delivery responsibilities are under the jurisdiction of state governments, I conclude by noting that the increased fiscal devolution to states under the Fourteenth Finance Commission constitutes an especially promising opportunity for a few states to try out this approach.