A Lean State That Delivers

The plan

1. The function test (30 days). Every ministry, department and agency publishes a scorecard that answers three questions: is this a pure public good (defence, police, courts, diplomacy, intelligence, regulation, statistics, culture)? Can a market supply it under contract? Is its return negative or unclear? Units that are not core are merged, contracted out or closed under a 12-month sunset.

2. Government as platform, not provider. Most public work moves onto open, interoperable public platforms built on the UPI model (NPCI built the rails; private apps deliver):

   • Open rails: each ministry and city runs a service platform with open APIs, published service standards, a published price per job (How the government buys) and a public job board. Platforms interconnect through one open data exchange layer, as Estonia's X-Road does, so any provider's systems plug in once and work everywhere.

   • Join by meeting the standard: any company, startup, cooperative or individual professional who passes the published certification test and posts the bond and insurance for its risk class joins within 30 days. There is no empanelment list, tender or turnover threshold (No licence raj).

   • Pick up, deliver, get paid: providers pick up jobs from the board; payment is released automatically on verified delivery (sensor data, a system log or the citizen's confirmation) within 7 days.

   • Ratings decide the next job: every delivery triggers the citizen's one-tap rating (Chapter 14). Jobs are offered in order of rating and results; a provider below the published bar for 2 months in a row is paused until it passes a re-test.

   • Switch any time: a citizen, city or department can move to another certified provider at any time with no exit fee. Every provider hands over data and records through the platform within 7 days, and lock-in clauses are void.

   • Everything documented and searchable: every job, specification, document, payment, rating and dispute is recorded, indexed and searchable on the public register within 24 hours, with citizens' personal data visible only to them and to auditors.

   • Where the line falls: platform jobs cover every task that can be specified, measured and handed over (services, maintenance, surveys, audits, builds, processing, inspections that a rotating certified inspector can do). Continuous roles that need one accountable person over time (judges and constitutional office holders on fixed terms; police, district heads, mission heads, regulators and officials who sign legal orders on 5-year contracts) stay in item 2A; the armed forces, defence and intelligence stay permanent. A network that can have only one operator in an area (a water main, a metro line) is assigned on the platform to one certified operator for at most 5 years and can be replaced after one quarter of poor results.
     2A. Continuous roles: a fixed-term contract, at market pay.

   • No permanent hiring, ever again. From day 1 the government creates no permanent post and hires no permanent employee. Every new piece of work is a need-based contract with a published need, outputs and end date: a task contract (a project, a survey, a build, a peak season) that ends when the work is done, or, for work that never stops, a 5-year renewable contract, renewed only on published performance scores, with the National Pension System (NPS). Task contracts can go to an individual or to any certified firm at the published price (How the government buys).

   • Memory stays with the office: every file and decision is digital (Chapter 4); contracts in a team are staggered so no more than a third end in any year; every exit includes a written handover and a 30-day paid overlap with the successor. The armed forces, defence and intelligence services stay permanent. Judges, the CAG, Election Commissioners and UPSC members keep their constitutional fixed terms.

   • Everyone, not just new hires. Within 1 year, existing permanent staff, IAS, IPS and the other All-India Services included, are offered conversion to contract with 6 months' pay. Once Bill A (Chapter 28) amends Articles 310 to 312, every remaining permanent civil post moves to a 5-year contract at its holder's next joining anniversary, and the All-India Services end. Permanent tenure then survives only in the armed forces, defence and intelligence.

   • Hired like the private sector. Every post above entry grade is filled by open competition, inside and outside government, through an independent search panel of a domain expert, an HR professional and a member from another department. The job description, pay and 3 to 5 measurable targets are published with the vacancy. Anyone qualified may apply, from a startup, a company, a university or another state.

   • Ends by default after 5 years. Every continuous-role contract, and every single-operator assignment under item 2, ends automatically after at most 5 years. There is no automatic renewal: the governing body (the performance board for staff, the buying body's board for firms) may renew it only by a written decision, published on the contract register, that gives the reason with the results data and citizen ratings (Chapter 14) behind it. A renewal is itself for at most 5 years. This mirrors the 10-year sunset on laws (Chapter 8).

   • Renewed or removed on results. Each contract carries 3 to 5 targets read from system data, never self-reported. Renewal needs at least 4 of 5 met. Missing most targets for 2 quarters in a row, or landing in the bottom 10% two years running after the 90-day plan, ends the contract early with 3 months' pay.

   • Market pay: an independent Pay Benchmark Board (an industry member, a statistician and an HR expert) publishes the market rate for every post each year, using EPFO payroll data and 3 independent salary surveys. Contract pay is that rate, plus 15% for police, fire and disaster-response posts, paid as fixed plus variable pay (item 2B). Nobody's pay is cut: today's fixed pay is never below today's salary.

   • Self-financing: each department's total wage bill is capped at today's level in real terms, so higher pay is paid for by fewer posts. Police is the one cadre that grows (Chapter 26); its growth is paid inside its government's overall wage cap by closing or selling other units.

   • Fewest posts: every task goes through a three-step test: automate it, else contract it out, else keep it in-house. Each ministry publishes its sanctioned posts, filled posts and wage bill every year. A suggested target is 10% fewer civil posts in year 1 and 20% fewer by the end of year 2, so posts average about 15% fewer in Chapter 1's first tax year (which starts at month 12), with a falling wage bill in real terms every year after. A new post needs a published reason signed by the minister; a post vacant for 12 months is abolished. Savings go first to closing the Chapter 1 year-1 gap, and then to a rate cut that Parliament votes on (Chapter 1).

   • Generous voluntary retirement (VRS). In year 1 every permanent civil employee outside the armed forces, defence and intelligence can apply for voluntary retirement. The package: 45 days' pay per completed year of service plus 25 days' pay per year remaining to retirement, capped at the pay for the months left to retirement; full pension and gratuity earned to date; leave encashment; and the Chapter 7 training voucher. Half is paid on exit and half 12 months later. Units marked non-core by the function test are offered it first; elsewhere an application is approved within 30 days unless held back under the critical-skills rule. Every post vacated is abolished on the day of exit.

   • Bribes: a proven bribe means dismissal, forfeiture of 5 years' pay and any unpaid bonus, a lifetime ban from every government post, and prosecution.
     2B. Fixed plus variable pay for every office. Every office, elected or appointed, from frontline staff to the Prime Minister, is paid a fixed salary plus a variable bonus, on the Singapore model:

   • The mix: the fixed part is the market rate set by the Pay Benchmark Board (never below today's pay). The target bonus, as a share of total pay, is 20% for frontline and entry grades, 30% for officers, district heads and regulators, and 40% for ministers, mayors, chief ministers, mission heads and the Prime Minister. The actual bonus runs from zero to twice the target.

   • Three equal parts: one third on the office's own 3 to 5 targets (item 2A); one third on citizens' after-service ratings for that office (Chapter 14); one third on the area score of its city, district, state or the country: the growth surplus above the published baseline (Chapter 14) plus liveability (PM2.5, tested tap water, road deaths, crime) and the monthly satisfaction survey. Ministers and the Prime Minister are scored on the country, chief ministers on their state, mayors and district heads on their area.

   • Elected office holders: the salaries of MPs, MLAs and ministers are set by an independent pay commission every 5 years at a published share of the Pay Benchmark Board's top executive rate, never by their own vote. Their bonus follows the same three parts, with the area score weighted half.

   • Metrics that cannot be gamed: targets and weights are fixed and published before the financial year; every number comes from system data, sensors, satellite data (night lights, PM2.5) and independent surveys checked by the statistics office, never from self-reports. Every target is paired with a guard target (growth with debt and air quality; cases closed with appeals overturned; speed with citizens' ratings), and a bonus part is paid only if its guard target holds.

   • Deferral and clawback: half of each bonus is paid within 30 days of the year's results and half after 3 years. The deferred half is clawed back if an audit finds data inflated by more than 2 points, and both halves are forfeited for any proven bribe.

   • Gates: no bonus for the head of a unit in a year with a proven bribe in the unit, a death from negligence, or a fiscal deficit above the state's published cap.

   • Cost: bonuses are paid inside each department's capped wage bill (item 2A), so the cost to the budget is zero. Every office's targets, scores and bonus are published on the public dashboard.
     3. Sell everything that is not strategic. Every non-strategic central public company and public sector bank is put up for sale, by open auction to the highest bidder (selling a scarce asset is the one place auctions stay, How the government buys). Each sale contract carries:

   • Performance covenants: a capex plan and service levels. For banks, one universal rule replaces sector lending quotas: every block in India keeps at least one branch or banking point.

   • A 10% performance bond held in escrow.

   • A call option (golden share): if covenants are missed for 4 quarters in a row after a 180-day cure period, the state buys the company back at the lower of book value or the price paid and sells it again. This stops buy-and-squat.

   • Strategic sectors (atomic energy, space, defence production, critical minerals) keep a minimum state presence, as in the 2021 public sector policy, under Sovereignty first.

   • Two routes in parallel: about 25 strategic sales, on one standard document set with a 120-day clock from bid invitation to signing, run by 5 parallel teams; and offers for sale of minority stakes on the stock exchanges.
     4. Certified private operators run local services, on the city platform. Water, waste, street lighting, city buses and parks move to pay-by-results through the item 2 platform model. The Housing Ministry publishes an open specification and certification test for each service. Any certified operator, of any size, can serve any city at the published unit price (per kilolitre, tonne, working light or bus-kilometre, How the government buys), paid only on sensor-verified results (Aadhaar playbook). A service that needs one operator per area, such as a water network, goes to a certified operator who posts the bond, for 5 years, and is reassigned after 2 missed quarters. An area unclaimed for 30 days gets +5% on the price, up to +10%.
     5. Merit everywhere.

   • Every role has a published skill test, taken every 2 years.

   • Units of 20 or more people are ranked on measurable output, read from system logs (cases closed, permits issued, payments made), never self-reported. Team results count for 50%. Peers in another state check the scores (the faceless audit, Chapter 13).

   • The bottom 10% get a 90-day improvement plan with training. Those still below standard who fail a retest leave: contract staff by non-renewal; permanent staff by FR 56(j) compulsory retirement where it applies, or by an inefficiency inquiry completed in 60 days.

   • Appeal to a tribunal within 30 days, decided within 30 days.
     6. Mission heads report to the Prime Minister. Every mission head in this book (for example land and records in Chapter 5, cashless payments in Chapter 2, digital public infrastructure in Chapter 4, law repeal in Chapter 8, sector cities in Chapter 18 and energy in Chapter 19) holds cabinet-minister rank (rank and status, not a seat in the Council of Ministers) and reports directly to the Prime Minister. Where a mission touches a State List subject, it acts only through an Article 249 or 252 law or the Chapter 28 ratification.

Cost and return

• Sale proceeds (estimate): ₹4 lakh crore closed in year 1, about 9% of the ₹45 lakh crore stake. Offers for sale alone can raise it: about ₹24 lakh crore of public-company free float × 1.5% a month × 12 months ≈ ₹4.3 lakh crore. Strategic sales, including the ₹26,544 crore IDBI receipt, add to this. Brokers already expect about ₹6.6 lakh crore of public-company stake supply.
• Use of proceeds (estimate): ₹3.85 lakh crore funds the Chapter 1 Transition Buffer, so the tax switch needs no new borrowing, and ₹15,000 crore seeds the Chapter 16 fund of funds, counted once, here.

Net to the budget (estimate):

• Voluntary retirement (estimate): if 10% of civil posts are vacated (the year-1 fewer-posts target), the wage bill falls by about 10% × ₹12.5 lakh crore ≈ ₹1.25 lakh crore a year, for good. The package averages about 40 months' pay (an employee with 20 years served and 12 left: 20 × 45 + 12 × 25 = 1,200 days), about 3.2 years of salary, so the one-time cost is about ₹3.75 lakh crore: about ₹1.9 lakh crore in year 1 and ₹1.9 lakh crore in year 2. It is financed through the Chapter 1 Transition Buffer and pays for itself in about 3 years.
• Conversion to contracts (estimate): a one-time cost of about ₹30,000 crore (10 lakh staff accepting × about ₹3 lakh, six months' pay), met as set out in Chapter 1.
• Market pay (estimate): lower grades already earn at or above private pay, so today's pay is their floor. Officer and specialist grades are about 10% of posts and about 25% of the roughly ₹12.5 lakh crore civil wage bill of the Centre and states (≈ ₹3.1 lakh crore; salaries are the largest part of the states' ₹15.6 lakh crore of committed spending in 2022-23, CAG); they rise about 1.75 times, a gross ₹2.3 lakh crore a year at full rollout. Under the wage-bill cap, officer posts fall about 35% as departments are divested (0.65 × 1.75 ≈ 1.14 times, +₹0.43 lakh crore), and lower-grade posts fall about 5% as bottom-10% exits are not refilled (−₹0.47 lakh crore). Net cost: about zero. The new rate applies as each contract is signed, so it phases in with the cuts. Police is the one growing cadre (Chapter 26).
• Local services market (estimate): about 4,800 urban local bodies × about ₹5 crore of contracts each ≈ ₹24,000 crore a year of pay-by-results work for Indian firms.
• Technology (estimate): a national HR and merit platform (online tests at proctored centres, output dashboards) and a covenant dashboard for every sold company: about ₹500 crore.
• Who runs it: DIPAM (the divestment department) runs sales on a published calendar, with sector regulators setting service rules. DoPT owns the merit system. Each city owns its local services, using the Housing Ministry's model.
• Jobs: after a sale the new owner decides which employees continue, on merit; there is no headcount covenant. Anyone not kept gets the one severance rule for every worker (Chapter 7), paid by the seller from sale proceeds, plus the Chapter 23 skills track.

Timeline

First 30 days:

• The function test is published for every ministry. No new permanent posts outside the armed forces, defence and intelligence; every new hire is on a 5-year contract with NPS.
• Cabinet approves the full sale list and a 12-month calendar. The first 5 strategic sales and 5 offers for sale launch.
• Parliament amends the bank nationalisation Acts of 1970 and 1980 and the State Bank of India Act so public sector banks can be sold.
• The merit framework and skill tests are notified for the first 10 large departments.
• The Housing Ministry publishes the local-service specifications, certification tests and unit prices, with 10 pilot cities.
• The Pay Benchmark Board is appointed, and every office's bonus targets, guard targets and weights for the year are published.

Within 1 year:

• Non-core units are merged, contracted out or closed, and every ministry is restructured around its core.
• ₹4 lakh crore of sales is closed, and every remaining non-strategic company is in a live sale process.
• Every permanent employee has received the conversion offer and the voluntary retirement offer; the VRS window closes at month 12.
• The first full merit cycle is complete: improvement plans run and appeals heard.
• Pay-by-results local services are live in all 100 Smart Cities.
• Every office is on fixed plus variable pay, and the first half of the year's bonuses is paid on published results.

Outcomes after year 1: the remaining state stakes are sold on the same calendar over the following years, at a pace the market can absorb.

Guardrails

• Floor price: no offer for sale below the 6-month average market price.
• Pace: in any month, shares offered in a company may not exceed 1.5% of that company's free-float market value.
• Competition: no size cap. A buyer may grow to any share of a sector. The Competition Commission (CCI) reviews every sale within 30 days and punishes abuse of dominance after the fact, with fines of up to 10% of global turnover.
• Banks: sold only to buyers RBI finds fit and proper. Every block keeps a branch or banking point, checked quarterly; a gap open for more than 30 days costs ₹10 lakh a month.
• Severance: staff of sold companies get the same rule as every worker (Chapter 7): 30 days' wages per year served, paid before exit, plus 1 month's notice.
• Merit: the bottom-10% rule applies only where a unit's bottom decile is also below the published absolute standard, so a strong team loses no one. A 5% faceless audit re-checks output data; proven falsification voids the unit's ranking for the year and starts a dismissal inquiry completed in 60 days.
• Local services: paid only on third-party sensor data, with every payment published monthly as open data.
• Voluntary retirement: the package is capped at the pay for the months left to retirement, so it never costs more than keeping the post. Every vacated post is abolished on the day of exit. Anyone who takes a severance or voluntary retirement package can never again hold a full-time or permanent post in any government body or public company. They may return only as a provider on a public platform (item 2) or on a fixed-term contract (item 2A), chosen through the same open process and paid the same published rates as any other contractor, with their earlier package recorded on the contract register. Staff under a corruption inquiry become eligible only once cleared.
• Critical skills: a department may hold back up to 10% of its applicants with critical skills for at most 12 months, with written reasons, while it hires replacements at market pay. Uptake and hold-backs are published monthly for every department.
• Bonuses: targets are fixed before the year and never changed mid-year; scores come only from system data and independent checks; every target has a guard target; half of each bonus is deferred 3 years with clawback; the area score uses the statistics office's figures, cross-checked against satellite data, and a gap of more than 2 points triggers an audit within 30 days.
• Surge reserve: each core department keeps a 10% reserve of contract staff for crises.
• Mission heads: a 5-year contract tied to 5 published targets, reviewed every year and continued only if at least 4 were met, with written public reasons; removal only by the Prime Minister, with reasons published within 7 days; a quarterly report to Parliament; and a CAG audit published within 90 days of each term's end.
• No political firing: renewals and removals are decided by an independent performance board on published scores, never by a minister. Every decision carries written reasons and can be appealed to a tribunal that decides within 30 days. Refusing an unlawful order in writing never counts against an official, and anyone removed for it is reinstated with double back pay.

Limits to know

The market cannot absorb all ₹45 lakh crore of state stakes in one year without crashing prices, so the year-1 goal is ₹4 lakh crore closed and every company in a sale process. Article 311 protects existing permanent civil servants who decline conversion until the Chapter 28 amendment takes effect; until then they can leave only through FR 56(j) or an inquiry.

Sources: NPCI: UPI ecosystem statistics by app · X-Road: Estonia's data exchange layer · ONDC: Open Network for Digital Commerce · IndianPSU: CPSE profits and losses 2024-25 · PSU Connect: public company market value near ₹70 lakh crore · 5paisa: FY26 and FY27 receipts, IDBI sale · Business Today: IDBI setback in FY26 · Kotak Neo: ₹6.6 lakh crore stake supply · Free Press Journal: CPSE dividends ₹74,017 crore · StaffNews: 40.35 lakh sanctioned posts · ThePrint: 2,800 All-India Services vacancies · Indian Mandarins: 122 officers compulsorily retired · Singapore PSD: salary components of ministers and the Prime Minister · Singapore PSD: 2012 white paper, salaries for a capable and committed government · The Star: Singapore performance bonus 2.5 to 6 months, 2016 to 2025 · Wikipedia: State Sector Act 1988 (New Zealand) · Tribune: Air India handed over to Tata group · Business Today: CAG, states' committed spending ₹15.6 lakh crore (2022-23)