Prime Minister Narendra Modi’s speech in Lok Sabha on February 10 is being interpreted as critical of bureaucracy’s backbone, the Indian Administrative Service (IAS). While the thrust of the speech was on the role of the private vs the public sector, Modi pointedly referred to the IAS and said, ‘Will babus do everything? If one becomes IAS, will they do everything like running fertiliser industries, chemical industries or flying a plane...what are we going to achieve by handing over our country to babus.’ [independent translation].
For some time, there has been a rich and informed debate about the necessity of inducting experts into central ministries. The recent move to appoint 10 joint secretaries in various ministries was generally welcomed as it was acknowledged that there are specific areas within each ministry which requires specialised knowledge, which is not necessarily available within the IAS, or other central services.
The need was to identify such positions and then find suitable candidates from outside the government. However, even while selecting candidates for lateral entry, the detailed exercise of identifying positions which required outside expertise was apparently not done. It is also not known if the persons appointed through lateral entry are being deployed to work in their areas of specialisation.
There is however, a broader point here. Like in previous governments, and even during the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government since 2014, IAS officers have been appointed to and excelled in posts which are highly technical in nature, and which were previously occupied by professionals.
Thus, IAS officers have been appointed as governors of the Reserve Bank of India. The posts of chairman, Airports Authority of India, CMD, National Mineral Development Corporation and chairman, Insurance Regulatory Authority of India have also been headed by members of the IAS. These are unarguably technical posts.
For long years, IAS officers have held positions in the legislature as secretaries general of both the Lok Sabha and the Rajya Sabha. Even in the financial world, we now have IAS officers as Chairman, ICICI Bank and the National Stock Exchange of India. SEBI has long been headed by IAS officers.
Many of these appointments are made after the official dates of retirement of these officers and are conferred at the discretion of the government. This shows the level of comfort and confidence between the political leadership and the IAS.
So, the IAS really does not have much reason to be disappointed by the remarks of the Prime Minister. Due to the breadth and depth of experience in the states and their long association with politicians, the IAS will continue to enjoy preferences in discretionary appointments. Any area requiring co-ordination with the states is said to be better served by an IAS officer due to deep contacts within the bureaucracy in the state governments.
The officers of the central services (e.g. income tax, customs, railways, audit, etc.) do not get to work within the state systems. They have little experience of working with politicians and are, therefore, poorly represented in discretionary appointments at the Centre as well as in states where the IAS faces almost no competition in garnering top positions.
As a related issue, there are a large number of public sector undertakings managed by IAS officers in various states which have been incurring losses year after year. The reasons for this merits a different and exhaustive discussion; but the IAS will also have to share some blame for the poor management of public institutions.
There is also the real argument that compared to professionals from the private sector, IAS officers are more ‘practical’ in executing the wishes of political masters. Thus, critics of the IAS argue that officers rewarded in our ‘spoils’ system do not question even poorly informed decisions of their political masters. Demonetisation of high-value currency and the sudden lockdown due to COVID-19 are examples of this.
There is, however, a broader and a more important point made by the Prime Minister.
He observed that “to use improper words against the private sector may have got votes for a few people in the past but those times are gone. The culture of abusing the private sector is not acceptable any longer. We cannot keep insulting our youth like this” [independent translation]. The implications of this statement need to be further mined.
There is no doubt that since the liberalistion of the economy, the private sector has played an important role in all major sectors ranging from airlines to telecom. In the agricultural sector as well, the entire supply chain of edible oils has been built up by the private sector.
Since about 70 percent of edible oil requirement is imported, the storage and refining facilities have to work with on-time inventories. The government does not keep a buffer stock of edible oils and yet, there has not been, in recent memory, a short supply of the same. Similarly, the supply chain of export of buffalo meat has been built entirely by the private sector.
The government reposed its faith in public sector when early in its term it announced an investment of about Rs 30,000 crore in setting up five urea manufacturing plants at Gorakhpur, Sindri, Barauni, Ramagundam and Talcher.
There is no doubt that the private sector is less ‘shackled’ or disciplined than the public sector in areas such as the recent, much-touted labour market ‘reform’. So obviously a simultaneity of rules and preferences seems to currently prevail. But in order to get at levels of efficiency and global competitiveness, while at the same time ensuring adherence to internationally acceptable standards and protocols of fair wages and humane working conditions, there has to be fair competition, which only a truly independent regulator can ensure.
An important consequence of increasing privatisation will be the denial of reservations to various categories of workers. Since the appointments in the private sector are not seen to be based on a fair and transparent process of recruitment (by the UPSC or state public service commissions, for example), the more marginalised castes and poorer sections of society will be at a disadvantage in finding employment.
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