A Lean State That Delivers

The idea

Imagine a district collector who got her job the way a great company hires its chief executive. The role, the pay and five clear targets were published for anyone to see. She competed against applicants from a startup, a university and another state, and she won. Her contract runs five years. She will be renewed, and everyone will know why: the data shows she delivered.

Now walk through a small town in her district at dusk. The streetlights come on, the bus arrives on time and the water from the tap is clean. No one holds these jobs by right. The city publishes each job on an open public platform, any certified company or startup picks it up and delivers, and it is paid the moment sensors and the citizen's rating confirm the result. Every job, payment and rating is recorded, indexed and searchable by anyone.

Across the state, a former public company, sold to a private owner, is growing, investing and paying taxes into the treasury.

The belief behind this chapter is simple. Capable people with clear goals and real accountability are what run a country well. I have come to see a lean state as the key that unlocks every other reform in this book: small where it should be small, strong where it should be strong, and quick to reward talent and act on results.

I think of it the way UPI works. NPCI built the open rails and the rules, and PhonePe, Google Pay and dozens of others built on top, competed for every user and won them by serving better. Government can work the same way: a platform, not a provider. The policymaker sets the policy and the guardrails, and companies and startups pick up the work, deliver it and collect their payment.

A lean state is a strong state. It keeps defence, justice, police, diplomacy, intelligence and regulation, and it runs them brilliantly. Everything else is opened to people who can do it better. New Zealand showed the way, and it is well within India's reach.

Why now

Acting now puts real money to work. In 2024-25, 63 loss-making central public companies lost ₹18,055 crore, a sum we can redirect every year. The government also holds listed stakes worth about ₹45 lakh crore (estimate), capital ready to work for citizens.

Sales can move much faster. The IDBI Bank sale took more than four years of process before approval in October 2026. One standard process can bring that down to months.

The civil service, meanwhile, has room to grow where it matters most. More than 2,800 IAS, IPS and Indian Forest Service posts are vacant, open to fresh talent. And performance management has room to sharpen: about 122 officers were compulsorily retired in three years. Each of these is an opening, and together they make this the right moment.

The big moves

Here is the path I would follow. Each step builds on the one before, and the detail is best worked out by the people who will run it.

1. Ask of every function: is this a job only the state can do? Start here, because the answer shapes everything else. Every ministry tests each unit against that question. Pure public goods stay and get stronger. Functions a market can supply under contract are contracted out, and those with no clear return are merged or wound up, freeing money and people for the core.

2. Government as platform, not provider. Next, we change how work gets done. The government stops hiring permanent employees altogether, and most work no longer needs a long contract at all. Each department builds open, interoperable public platforms, with open interfaces, published standards and a published price for each job. Any company, startup or professional who passes the certification test joins, picks up jobs, delivers, and is paid per verified result, with the citizen's after-service rating (Chapter 14) shaping who gets the next job. A city or a citizen can switch provider at any time, so no one sits on work for years, and every job, document, payment and rating is indexed and searchable by anyone. Only roles that need one accountable person in the chair over time, such as judges, police, district heads, regulators and inspectors, are filled on five-year contracts, renewed on results. Only the armed forces, defence and intelligence stay permanent, and judges and constitutional office holders keep their fixed terms. Every role above entry grade is filled by open competition. Renewal rests on a handful of measurable targets read directly from system data. Pay matches the market, so the best people can afford to serve, and every current salary is protected. Existing permanent staff are offered a fair, paid move to contract.

3. Sell what is non-strategic, with promises that bind. With the core clear, every non-strategic public company and bank goes up for sale, with service covenants, a performance bond and a buy-back right that secures delivery. For banks, one simple rule replaces lending quotas: every block in India keeps at least one branch or banking point. Strategic sectors like atomic energy, space and defence production keep a state presence.

4. Pay for results in local services. Then we bring the same idea to the street. Water, waste, street lighting, city buses and parks move onto the city's open service platform, where certified providers of any size pick up work at a published unit price and are paid on sensor-verified results and citizen ratings. Where a network needs one operator per area, such as a water main, the operator can be replaced within one quarter of poor results, with all data and records handed over on the platform.

5. Give mission heads real authority and real accountability. Alongside, each mission head in this book reports directly to the Prime Minister with cabinet-minister rank, serves a 5-year contract tied to published targets reviewed every year, and reports openly to Parliament. Talent leads, and results decide who stays.

6. Pay every office like a great company pays its leaders. Then we tie pay to results, for everyone from a clerk to the Prime Minister. Every office, elected or appointed, earns a fixed salary plus a variable bonus. The fixed part is the market rate and never falls below today's pay. The bonus is a published share of pay: 20% for frontline staff, 30% for officers and 40% for ministers, mayors, chief ministers, mission heads and the Prime Minister. One third of it rests on the office's own targets, one third on citizens' after-service ratings (Chapter 14) and one third on how the whole city, state or country did, from growth above its baseline to cleaner air, safer streets and happier citizens. The leader who helps an area keep what it grows (Chapter 14) shares in that success, so every official pulls in the same direction as the people they serve.

7. Open a generous door out. Next, we make leaving an attractive choice, not a fight. Every government employee is offered a voluntary retirement package more generous than any India has offered before: 45 days' pay for every year served plus 25 days' pay for every year left to retirement, never more than they would have earned by staying, with full pension earned so far and a training voucher. Each post vacated this way is abolished, never refilled. Units being closed, merged or automated are offered it first. A government that shrinks by choice keeps goodwill, and the people who leave take their skills into the private economy.

8. The fewest posts that can do the job. Finally, we keep the state lean year after year. The best post is the one that is never needed. Every task is automated first, opened to providers on a platform second, and kept in-house only when neither works. Each ministry publishes its post count and wage bill every year, and both go down. A new post is created only with a published reason, and any post left vacant for a year closes. Fewer, better-paid people with modern tools deliver more, and the saving flows straight back to citizens.

Today vs the new way

Here is how a lean state compares with today on the money it keeps and the people it runs on.

The cost of running government stays about the same, while public money is freed, sales speed up, and results decide who stays.

Proof it works

New Zealand made its top officials accountable. Its State Sector Act of 1988 put the chief executives of government departments on fixed-term performance contracts of up to five years, appointed by an independent commissioner. A small country showed that the people at the top can be hired and renewed on results.

India already runs on platforms. NPCI built UPI as open rails, and private apps such as PhonePe and Google Pay now carry most of its payments, competing every day for users. ONDC is doing the same for online commerce, and Estonia's X-Road lets every public and private system exchange data through one open, secure layer. In each case the state set the rules and others did the delivering.

Singapore pays its leaders for national results. Since 2012 a Singapore minister's pay has a fixed part and a variable part. An individual performance bonus has ranged from 2.5 to 6 months' pay, and a National Bonus of up to 6 months rises or falls with four national numbers: median income growth, income growth for the poorest fifth, unemployment and GDP growth. Its leaders gain only when ordinary citizens gain, and Singapore has stayed among the cleanest and best-run governments in the world.

India sold a giant and freed the budget. For years Air India was a weight on public finances. It was sold to the Tata group for ₹18,000 crore and handed over in January 2022, lifting that burden from the budget.

Generous exits have shrunk Indian public bodies before. In 2000-01 the public sector banks offered voluntary retirement, and about 1 lakh employees, roughly one in nine, took it in a single round. In 2019 BSNL and MTNL offered 35 days' pay per year served plus 25 days per year left, and about 92,000 people, about half their staff, chose to leave within weeks. Generous, voluntary and fast works.

India can sell a public bank. The IDBI Bank sale to Fairfax, approved in October 2026, is valued at ₹52,878 crore and brings the Centre about ₹26,544 crore. The lesson I draw is twofold: it works, and one standard process can make it far faster.

What success looks like

• In the first 30 days: every new hire outside the armed forces, defence and intelligence joins on contract, and the first sales are launched.
• Within 1 year: every ministry is rebuilt around its core, and ₹4 lakh crore of sales is closed, with every remaining non-strategic company in a live sale process.
• Within 1 year: every permanent employee has received a fair offer to move to contract, and the first full merit cycle is complete.
• Within 1 year: every office, from frontline staff to ministers, is on fixed plus variable pay, and the first bonuses are paid on published results.
• Within 1 year: pay-by-results local services are live in all 100 Smart Cities.
• Within 1 year: every ministry publishes its post count, and the total number of civil posts is at least 10% lower, with the wage bill falling every year after (suggested target).
• Within 1 year: the voluntary retirement window has closed, and about 10% of civil posts have been vacated by choice and abolished (estimate).
• Within 1 year: the budget gains about ₹0.38 lakh crore a year from lower interest and money redirected from loss-making companies (estimate).

Guardrail ideas

Ideas to start the conversation, for the builders, experts and the public to shape together.

• No one holds public work by right. Platform work is picked up job by job, and a provider whose ratings or results fall below the published bar is paused automatically until it improves. The few continuous roles end after 5 years by default, the same idea as the 10-year sunset on every law (Chapter 8), and continue only if their governing body renews them with a published reason drawn from the results data and citizens' after-service ratings (Chapter 14).
• Every job open, every record searchable. Every platform publishes its interfaces, standards, prices and certification test, joining takes no empanelment or favour, and every job, document, payment and rating is indexed and searchable by the public within 24 hours, with citizens' personal data shown only to them.
• Careers decided on merit. Renewals and removals are decided by an independent performance board on published scores, with written reasons and a fast appeal.
• Courage is protected. An official who refuses an unlawful order in writing is fully protected, and anyone removed for it is reinstated with double back pay.
• Every salary is protected, and every exit is fair. Today's pay serves as the floor, and staff of sold companies receive the same severance rule as every worker.
• Need first, then the contract. Every contract states the need it meets, its outputs and its end date, all published, so work is bought only when it is needed.
• A post that empties stays empty. Every post vacated through voluntary retirement is abolished the same day, and anyone who takes a severance or voluntary retirement package returns to government only as a provider on a public platform or on contract, never in a full-time role, through the same open process and published rates as everyone else.
• Bonuses that reward results, not tricks. Every office's targets are fixed and published before the year begins and read from system data and independent surveys, never self-reported. Each target is paired with a guard target, so growth counts only alongside debt and clean air, and speed only alongside citizens' ratings. Half the bonus is paid at once and half after 3 years, clawed back if an audit finds inflated data, and any proven bribe or death from negligence in the unit ends the year's bonus for its head.
• The best are kept where they matter. A department can hold back up to 10% of applicants in critical skills for at most 1 year, while it hires replacements at market pay.
• Growth is welcome, fair conduct is required. A buyer is free to grow as large as it can, with the state's oversight focused on cartels and anti-competitive conduct, so success is rewarded.

FAQs

Q: Will contracts leave officials open to pressure?

A: I understand the worry, and I believe contracts give good officers more security, earned through results. Today, permanence shelters the weak performer while the honest officer stays exposed to transfer and pressure. Under contract, an independent board judges on data, removal decisions rest with that board alone, and refusing an unlawful order is protected by law. Good officers gain security from results rather than tenure.

Q: Will private monopolies replace public ones?

A: Competition stays strong, and every operator plays by the same rules. The Competition Commission reviews every sale and can impose heavy fines for anti-competitive conduct, and the same service rules bind every operator, public or private. Size is welcome; fair conduct is what the rules secure.

Q: If anyone can pick up a job, who is accountable when it goes wrong?

A: Accountability becomes sharper. Every job carries the provider's name, bond and insurance, every result is measured by sensors and rated by the citizen, and a provider who falls below the bar loses new work automatically. The department that runs the platform answers for the rules, the prices and the results, and the citizen can switch provider at any time.

Q: Who keeps the memory of government if everyone is on contract?

A: The system does. Every file, decision and reason is digital and searchable (Chapter 4), so knowledge stays with the office, not in one person's head. Contracts are staggered so a team never turns over at once, and every handover comes with a written note and a 30-day overlap. Strong performers are renewed again and again, so experience stays where it adds value.

Q: What about judges, soldiers and the police?

A: Each keeps what makes it work. Judges keep fixed terms, because their independence protects every citizen. The armed forces, defence and intelligence stay permanent, because loyalty and secrecy there need a lifetime career. Police officers serve on five-year contracts at market pay with a risk premium (Chapter 26), renewed on results, so good officers stay and continuity holds.

Q: Will bonuses make officials chase numbers instead of serving people?

A: The design guards against exactly that. A third of every bonus comes from citizens' own ratings after each service, and every growth target sits beside a guard target such as debt, air quality or appeals overturned, so one number cannot be pushed up by harming another. Half of each bonus waits 3 years and is clawed back if the data proves wrong. Most people in government want to do good work, and this simply lets their pay say so.

Q: Why pay people so much to leave?

A: Because it is the cheapest way to a smaller state. The package averages about 3 years' pay (estimate), while each post abolished saves its salary every year for good, so it pays for itself in about 3 years. And because it is voluntary and generous, the change comes with goodwill, not strikes.

Q: Is this selling the family silver?

A: It puts the family silver to work. Silver locked in a cupboard earns nothing. Sales retire debt, free public money and release capital for growth. They run on a steady calendar with a floor price, so the nation gets fair value.

The detailed blueprint for this chapter, a starting draft for the mission heads, industry and the private sector to refine, is in the Implementation Annex.