Lateral entry into the bureaucracy will seek outside specialists, not work around the system

by Arvind Panagariya

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In an article published in this newspaper in September 2000, ‘ Bringing Competition to Bureaucracy’, I had argued that increased complexity of policymaking required opening up of the top bureaucracy to outside specialists. I recommended, “Positions at the level of joint secretary and above should be filled by fully open competition. To ensure fairness in the process, the UPSC (Union Public Service Commission) can be entrusted with the task of administering the selections. When outside individuals are chosen, they may be brought on fixed terms of a suitable length.”  

Two decades later, the government has set the stage for this important reform. It has invited applications for 10 joint secretary positions for terms lasting three to five years. Surprisingly, however, the majority of news stories have taken a sceptical view of the GoI announcement. 

A key criticism has been that this is nothing new; lateral entry, most prominently of economists, has been a feature of our bureaucratic system for a long time. Numerous talented economists, beginning with I G Patel and Manmohan Singh, and ending with Arvind Subramanian and Sanjeev Sanyal, have held senior bureaucratic positions. 

Such scepticism is wholly unwarranted. Entry of less than two-dozen talented economists over a period of 65 years can hardly serve as evidence of openness of the system. On the contrary, in the background of entry of almost every talented economist prior to 2000, there lurks a story of a long wait outside the door by the entrant, while some enlightened insider worked his way around the system to crack open the door to pull him in. 

More to the point, nearly every one of the economists who entered the system prior to 2000 did so through appointment as economic adviser in some ministry: I G Patel, Montek Singh Ahluwalia and Shankar Acharya in finance; Manmohan Singh, Vijay Kelkar and Jayanta Roy in commerce; and Rakesh Mohan in industry. 

But beginning in the early 2000s, this path to entry got closed. All economic adviser positions — except those of the chief economic adviser (CEA) and principal economic adviser (PEA) in the ministry of finance — came to be reserved for the members of the Indian Economic Service. 

The Window Shrinketh 
The result has been that since the early 2000s, no prominent outside economist has entered bureaucracy on a long-term basis. Those joining on short-term basis have been either the CEA (Kaushik Basu, Raghuram Rajanand Arvind Subramanian) or PEA (Ila Patnaik and Sanjeev Sanyal). 

Outside entry is not just about economists. Traditionally, like the CEA and PEA positions, a small number of other technically demanding top positions have been open to outsiders. 

These include secretary-level positions in areas such as science and technology, biotechnology, space, atomic energy, health research and agricultural research. 
Some may argue that GoI routinely hires outside specialists as consultants or officers on special duty (OSD). This is true. But the effectiveness of such hires is greatly compromised by the fact that all decisionmaking power remains concentrated in the regular bureaucracy. I experienced this first-hand at the NITI Aayog where we had hired a large number of outside specialists as consultants and OSDs. 

Against this background, the recent announcement to hire 10 joint secretaries from outside is genuinely a path-breaking reform. For the first time in our 70-year history, the system itself is being opened to bring outside experts into bureaucracy on a competitive basis. Entry will not be by working around the system but through an explicit change in the rules of recruitment. And the objective is not to bring into the bureaucracy a specific individual by working around the system, but to proactively seek outside specialists on a competitive basis. 

One might ask why fix the tenure at 3-5 years? The answer is that this way, only those confident that they have the talent to find another good job at the end of their stint in government would dare leave their jobs. Moreover, in case GoI makes a mistake and selects a below-par candidate, the cost would be minimal. 
Is there a danger that the short tenure would undermine the effectiveness of outside entrants? If this is a one-off event, yes. But if this is permanent change that would bring a small percentage of senior officers into the system from outside every year, no. Reluctant permanent members of the bureaucracy will then have to come to terms with the fact that competition from talented outsiders is here to stay, and that they have no choice but to cooperate with them. 

The Pool Expandeth 
An added advantage of the shorter term is that over time, it will create a pool of talented individuals outside the government with knowledge of its inner workings. This pool will then be available for yet higher-level appointments as well as assistance on specific short-term tasks. 

Finally, will the short term pose a conflict of interest on the part of the entrant? No. Whether an officer chooses to abuse his position for personal gain depends far more on his personal character and checks and balances in the system than on the term of the appointment.