Golden parachutes, leaden results

Retiring officers of the IAS, IPS and the judiciary become regulators and head commissions, weakening the state

In Japan it is called Amakudari ("descent from heaven"), the practice whereby senior Japanese bureaucrats retire to high-profile positions in organisations linked to their ministries, in both the private and public sectors. Once seen as embedding a tacit co-ordinating mechanism that underpinned Japan's guided capitalism, over the long term this practice led to collusion, regulatory forbearance and preferential treatment, with pernicious effects for the country.

But even as this system is ebbing in Japan, in India post-retirement golden parachutes for senior officials in the Indian Administrative Service (IAS), the Indian Police Service (IPS), the judiciary and of late the armed forces are mushrooming. These officials are emerging as the principal beneficiaries of a new spoils system. This arrangement, which is rooted in the proliferation of regulatory bodies and commissions, ensures continued employment and perks well after retirement. Even as older bureaucratic cultures of self-restraint fall away, the consequences of these new trends are deeply troubling.

The recent gubernatorial appointments are illustrative. As reported in The Hindu recently, the current governors include four former IAS officers and eight former IPS officers, while three have served in the army. More interestingly, IPS officers come from the three agencies - the Special Protection Group (SPG), the Intelligence Bureau (IB), and the Central Bureau of Investigation (CBI) - that have inside knowledge of the political class and their shenanigans or have been in a position to potentially grant special favours, as is the case with the CBI. Who has better knowledge of the movements and meetings of Robert Vadra than those who guard him round the clock? It is, therefore, hardly surprising that those handling the security of the Congress party's first family have been routinely rewarded for their discretion with governorship.

But gubernatorial appointments are just the tip of the iceberg. As new regulatory bodies were formed after the mid-1990s, the IAS saw a golden opportunity to ensure there was no descent from heaven - at least for some of its members. The judiciary used its veto power to mandate that each regulatory body should have a retired judge. It even insisted that new appellate bodies be created to appeal against the regulators' decisions (and even that would not be the final word) - which, of course, incidentally created more openings for retiring judges.

In many ways, the Adarsh housing society saga in Mumbai has been the template for overcoming veto points: just be more inclusive and make sure that every service concerned that could create roadblocks is placated with a seat for itself. This results in an expansion in the number of bodies and the number of members of these bodies.

These trends do not bode well for the country. First, the creation of new regulatory bodies is to some extent being driven by the parachuting possibilities they offer to the very secretaries responsible for designing them, adding ever more layers of government.

Second, these processes are further stymieing the introduction of professionals and expertise into specialised organs of the state. Lateral entry into the higher levels of the bureaucracy and the judiciary has become much like hanging - occurring in the rarest of rare cases. And it has become equally so for these new bodies; a system of spoils has ensured that fresh blood and fresh thinking have little place.

Third, the distinguished members of these bodies are hyper-conscious of their status and very particular about the perquisites of being members - housing allocation is a prime example. Since no one wants to let go of the lure of Lutyens' Delhi, fixed housing allowances are spurned. In a spate of contempt of court notices issued by the judiciary, different ministries have been pressured to allocate housing to former judges - and now members of these bodies.

However, the most damaging effect has been behavioural: the prospect of harvesting post-retirement jobs affects behaviour before retirement. Earlier when a government secretary or a Supreme Court judge retired, it meant a closure of one's service in the government. Not any more; there are numerous stories of secretaries distracted by their quest to find their golden parachute in the year before retirement, with obvious costs for policy making. Moreover, since success depends considerably on his minister's discretion - and both sides know that - the secretary is likely to be more "helpful" in ensuring due attention is paid to the multiple interests of the minister. And, expectedly, these behavioural effects are true not just for secretaries, thereby resulting in an unhealthy nexus. 

However, it cannot be denied that there is a need for many of these new regulatory bodies and commissions, although much less than their current proliferation. Also, they have to be staffed by competent experienced personnel. This issue can be addressed by mandating that officials at the joint secretary (or high court judge) equivalent rank have to choose between continuing with their service or opting out for the tribunal/commission track, but with a common mandated retirement age.

In the case of ad hoc commissions, the incentives for membership can be altered by mandating fixed terms; else they will find enough reasons for long lives and will attract more suitors. The Cauvery tribunal took 17 years, while B N Srikrishna-headed Financial Sector Legislative Reforms Commission is set to deliver in two years. While personalities of the individuals concerned have certainly mattered, in the latter case innovative arrangements were made in engaging non-governmental expertise with background research and - importantly - paying a fixed lump sum for its recommendations, thereby removing any incentive to prolong the work.

It is certainly important to engage the expertise of many retiring senior officials, whether in constitutional bodies or in advisory capacities. But that is a far cry from current practices, which are further weakening the Indian state.

The writer is director of the Centre for the Advanced Study of India at the University of Pennsylvania