Here today, gone tomorrow

A humble probationer reporter, bank clerk, whatever is given six months to a year to prove that he or she is up to the job. In the cloud-c...

A humble probationer reporter, bank clerk, whatever is given six months to a year to prove that he or she is up to the job. In the cloud-cuckoo land where our bureaucrats dwell, a privilege granted to raw greenhorns is denied to the head of one of India8217;s foremost financial institutions, the Life Insurance Corporation LIC.

Before I go on, let me note a relevant fact. The Appointments Committee of the Cabinet laid down the directive, supposedly sacrosanct, that those holding senior management posts in the Life Insurance Corporation and the General Insurance Corporation must have at least two years in office.The civil service has mismanaged affairs with such comprehensive lack of foresight that the next chairman of the LIC, assuming that it is the man recommended to the Government of India, will have only four months in that seat from July 1 to October 31. His successor will be somewhat luckier, enjoying office for nineteen months from November to May 2002. But his successor, assuming that the current pattern holds, will have a brief, two-month tenure!

The LIC is not just any old firm. It is charged with the responsibility of servicing ten crore one hundred million policies. It has Rs. 147,000 crore to invest, more than any state government8217;s budget.

The LIC has enjoyed the benefits of monopoly even before Indira Gandhi8217;s frenzied swing to the left. But those palmy days are ending as India enters the age of competition. There is no inherent reason for the corporation to fear the entry of rivals. But it is asking too much for a ship to enter uncharted waters when there is no captain at the bridge which is what will happen if bureaucrats persist in their policy of foisting revolving-door chairmen.

At this point, look at the current management structure of the corporation. At the top of the pyramid is G. Krishnamurthy, the chairman. Two managing directors, G. P. Kohli and Y. P. Gupta, are next in the hierarchy. A dozen executive directors and zonal managers selection grade are on the third rung.

The current chairman was appointed in 1997. A look at the records would have revealed that he was due to retire in June 2000. Those same archives would have shown that one of the two managing directors would retire on the same day as the chairman, making it self-evident that he cannot succeed the outgoing chairman. But the other managing director, too, has only four months before the mandatory age of retirement leading to the idiotic situation where the head of the Life Insurance Corporation has only four months in office.

Can8217;t you raise someone from the third tier by a notch? Whereupon some demand: quot;Where is the vacancy?quot;; a fair question since there is a provision for only two managing directors. Of course, there will not be an opening until one of them moves up and the other moves out. In other words, the corporation gets a new chairman and two new managing directors all simultaneously.

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Of the 12 in the third tier, there is just one man, repeat one, who has two years to go before he retires, while another will also have to be a new managing director. When Y. P. Gupta after four months in office retires in October, one of the two takes over for all of nineteen months. By the time that time is up, his colleague will have little time left in office, barely two months. In other words, crass mismanagement would have ensured that a hat-trick of chairmen shared a little over two years between them.

Let us see: the Union Cabinet laid down the principle that the senior men of the Life Insurance Corporation and the General Insurance Corporation must enjoy a two-year tenure. This sacrosanct8217; directive shall be violated thrice in four months when Y. P. Gupta becomes the chairman, when P. C. Gupta becomes a managing director, and when P. C. Gupta is elevated to the chairmanship.

But there is a more important question which we have lost sight of are dates of birth more important than merit? The LIC is about to face augmented competition. It desperately needs leadership. Is the Government of India providing it with that guidance by converting the chairman8217;s office into an arrival-and-departure lounge? Why is nobody talking about giving the best man a fair time in office, irrespective of when he happens to celebrate three score years?

I wish I could say that what is happening at the corporation is a mere aberration. Unfortunately, the truth is that there is no succession policy worth the name anywhere. The Ministry of Finance has opined that the chairman of the State Bank of India should be given two years in office. This itself was a step back from the Reserve Bank8217;s recommendation of a three-year tenure, but let that pass. How is this principle honoured in practice?

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The State Bank of India is the largest bank in India, with 14,000 branches spread across the country along with its associates. How has the bureaucracy treated this premier institution? Let us just say that, from September 1, 1995, up to today, there have been five chairmen of the State Bank of India. The average works out to less than a year per man.

Is there any hope for the future? Leafing through the records reveals a dismal tale assuming seniority is the sole criterion, we could see as many as eight chairmen of the State Bank of India between now and July 2004. That is an average of six months, making those one-year tenures look quite healthy!

The mismanagement continues in other major financial institutions. There is no succession policy in the Unit Trust of India, the IDBI, and several others of the kind.

The Government of India needs to get its act together as far as promotions and appointments are concerned. I have a simple suggestion: select the best person for the job, offering a clear two years in the saddle. If the chairman celebrates a 60th birthday in the middle of that tenure, so be it. When there are one hundred million policies to tend, a figure of three score years pales into insignificance, doesn8217;t it?