Stick to rules: Avoid discretion on cooling-off period for bureaucrats

Rules for the all-India services require that officials undergo a “cooling-off period” of a year after they retire and before they can join a private firm. The cooling-off period used to be two years earlier, but was cut by half by the current government in December 2015. Individual bureaucrats can apply for waivers, and one such was granted to S Jaishankar, who was till very recently India’s foreign secretary, and has now joined the Tata Group as its new president in charge of global corporate affairs. His appointment to an executive position in the private sector required the consent of the department of personnel and training in the Union government and, therefore, of the prime minister, whose bailiwick that is. There are many other examples over the past decades of such discretion being applied: Former finance secretary Ashok Jha was granted one to join as head of Hyundai India; and, of course, the current government’s first major executive action was to suspend service rules on behalf of Nripendra Misra, now the prime minister’s principal secretary.

Going beyond these specific cases, the larger question of discretion in such a decision needs to be revisited as it is not a good practice for these choices to be made case by case. Senior bureaucrats occupy key policymaking positions in the government and the cooling-off period is a good way to reduce any possible conflict of interest. Such a break also shields bureaucrats from any inconvenient questions without taking away their right to take up an employment of choice in the future. Again, this is not a India-specific issue. In Japan, there was for decades a practice known as “amakudari”, or “descent from heaven”, in which bureaucrats would “descend” from Kasumigaseki, Tokyo’s equivalent of the Lutyens zone, to well-paid posts in the private sector. At that point, Japanese regulations were similar to Indian service rules. The result was several well-publicised scandals. Subsequently, the law was tightened: Retired government officials could not serve in a sector with which they had any interaction in office, and contact between ex-officials and those in their former ministries was restricted. 

Similar reforms were demanded by an Indian parliamentary committee in 2014, which indeed extended its concerns to “consultancy” or non-executive work undertaken by retired officials. There were also demands to extend the cooling-off period. Regardless of the details, the key thing is that the principle of a mandatory one-year cooling-off period should be adhered to without exception. There is already a well-laid procedure for processing of proposals for grant of such permission to officers who retire as joint secretary and above. This has been done to ensure that grant of such permission does not depend on the discretion of the government of the day. Sticking to the rules is essential to maintaining the proper distance between policymaking and corporate interests. Otherwise, every time such an exception is granted, it begs the question: Why have such a rule in the first place?