The new prime minister must restore the primacy of the appointments committee of the cabinet.
In 2007, the Appointments Committee of the Cabinet (ACC) approved a proposal to post an income tax officer as joint secretary in the ministry of shipping. When the officer concerned reported to the secretary of shipping, he was told that the minister was opposed to his appointment and that he could not join. The minister took up the matter with the PMO and got the orders changed. This was unheard of.
This may be an extreme instance of how a particular minister subverted the decision of a cabinet committee, but in the last 15-20 years, all senior appointments in the Central government have taken place almost entirely at the behest of individual ministers, and not on objective consideration by the establishment officer, civil services board (chaired by the cabinet secretary) and the ACC, as was the case until, say, the 1990s. There are numerous instances in which the establishment officer and cabinet secretary advised individual officers to approach the minister concerned and secure his consent before their names could be proposed.
What is the effect of this subversion on the quality of government and the decision-making process? The then telecom minister chose his secretary and we all saw what happened to both. It is no exaggeration to claim that nearly 80 per cent of all officers of the rank of joint secretary and above serving in the Central government today have been handpicked by individual ministers, though under the guise of a “formal” process.
The essence of good governance is the relative independence of senior officers to express their views in the files without fear or favour. If the officer is handpicked by the minister concerned and not selected and appointed on objective consideration, he would, at best, not express his contrarian views and merely pass the buck or, at worst, consult the minister before recording his comments. In many cases, this is precisely what is happening. This is the biggest cause of what is popularly called policy paralysis.
The only remedy is to restore the primacy of the ACC, which essentially means restoring the primacy of the prime minister. If an officer is appointed to a senior position by the ACC out of a panel of names recommended by a committee of secretaries, such as the civil services board, where the secretary of the ministry concerned is also represented, that officer arrives at the ministry without the baggage of obligation or loyalty to the minister. This is how appointments were usually made before the coalition era. In 10 years of the UPA and even during the preceding decade, coalition partners and ministers belonging to the dominant party quickly learnt from their colleagues and handpicked their officers. When many criticised the former prime minister as weak, his inability to assert the primacy of the ACC and his office in senior appointments to posts, both within the government and its undertakings and other constitutional and statutory institutions, contributed to that perception.
Appointments to public sector banks and financial institutions also need drastic modifications to bring about greater professionalism and objectivity in board-level appointments. For several years now, an internal committee of the finance ministry headed by a deputy governor of the RBI selects candidates based on performance appraisal reports, personal interviews and the ACC’s approval. It is believed that most such appointments are less than objective. Besides, the arbitrary posting of selected candidates to individual banks contributes to corruption, as it is alleged that the posts of CMDs — if not the posts of EDs — in bigger banks are secured through less than fair means. Also, selected candidates are often posted to banks other than where they served through their careers. Since most such officers would have two to three years or less of service left when posted as ED or CMD, they can hardly contribute to the bank concerned as they have to spend time understanding the ecosystem of the bank.
No less urgent is the need to restore order in the appointment and management of public sector undertakings. It is known in the steel ministry how a former minister had posted a dozen-odd officers solely to monitor tenders and procurements in individual steel plants besides sponging SAIL and such other PSUs under his charge for sundry benefits. This is not unique to the steel ministry; almost all PSUs are treated as fiefs for the minister and officers of the administrative ministry to lord over and exploit for private gains, small and big. It is said that some ministers used to appoint independent directors to the boards of PSUs. The end result is the selection and posting of incompetent directors in many cases and overall degradation in the functioning of PSUs.
Successive governments have been talking about PSU reform but until the ministries let go of their intimate control on these bodies, no other reform will work. There is an urgent need to fix this by clearly demarcating the limits of power and the role of the ministries in running the undertakings/ banks. The threats used by the ministry to discipline and coerce these entities should be identified and the exploitative ones removed from the rulebooks.
Third-party evaluation of performance should supplement, if not replace, pervasive ministry oversight. Some ministries, like steel and heavy industries, do not have much justification to exist as they add no value to the work of the PSUs under their control and instead perform an intrusive and often obstructive role. Fixing some of this does not call for any new legislation. It only needs a strong will on the part of the prime minister and the willingness of the ministers concerned to relinquish some control for the larger good of the economy.
Now that a new government is coming into being under a single party, correcting some of these ills should be possible. And if these changes are not made, no amount of good intent can deliver the kind of results the prime minister-designate has promised.