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Nandan Nilekani of Infosys and Rajya Sabha member Bimal Jalan do not belong either to the same generation or to the same profession. Nilekani, in his early fifties, is an engineer who became one of India's most successful first-generation entrepreneurs and has led his company to unprecedented heights.
Jalan, in his late sixties, is an economist who occupied almost every important economic post in the Indian government (banking secretary, chief economic advisor and finance secretary), before becoming the RBI governor and then a member of the Rajya Sabha.
But both believe that senior officers of the department of economic affairs (DEA) in the finance ministry should rethink their role in the present context and strive hard to attain intellectual leadership in policymaking.
Both spoke at a luncheon meeting with about 50-odd DEA officers at an off-site retreat early this month. This is the first time that the DEA - which was at the forefront of Manmohan Singh's economic reforms programme launched in the early 1990s - has organised an off-site retreat to take a fresh look at how it ought to function in the changing economic landscape.
That such a meeting was conceived in the first place, not in the usually suffocating environment of one of the North Block conference halls but in Suraj Kund, a tourist resort in Haryana, and that persons like Nilekani and Jalan were invited to speak to its officers are a clear indication that winds of change are blowing in North Block.
Such fresh thinking, though, is not entirely unexpected from the man who planned it all - D Subbarao, who is now the finance secretary and in charge of the DEA, worked there as a joint secretary in the early years of economic reforms in the 1990s.
If Nilekani was a little circumspect in his suggestions for a changed outlook (provide intellectual leadership by planning policies to usher in the economy's transition to a low-carbon economy), Jalan was quite candid in his views.
There was a time when DEA officers could earn clout by rationing foreign exchange, he said. Who else but Jalan, who was at the helm of the finance ministry at a time when such
rationing was indeed the norm, could have said this with greater conviction? Palaniappan Chidambaram, who spent two hours with these officers at the off-site meeting, was even more candid. In an effort to capture how civil servants have changed over the last twenty years, Chidambaram referred to the ostentatious lifestyle some civil servants led these days, giving the entire service a bad name.
He conceded that most civil servants were competent and well-qualified to do the job given to them. And even though civil service did not fully endorse meritocracy in the manner in which promotions and compensation packages were decided, there would only be a few cases where civil servants reached the top without being meritorious, he said.
Civil servants, particularly those in the North Block, have changed in many other ways. In the 1990s, DEA officials would spend most of their time in handling the World Bank, the International Monetary Fund and other donor countries like Japan.
Negotiating with these multilateral institutions and donor countries for higher official development assistance would be their top priority. Initiating reforms in fiscal or sectoral policies became part of the agenda only when that helped gaining access to such funds. Today, the multilateral institutions and donor countries are not a priority.
Fifteen years ago, there were only two regulators to deal with. One of them, the Securities and Exchange Board of India, had not acquired the kind of clout that it has today. Today, there are many more regulators to deal with and more of them are likely to be set up in the next couple of years. With so many regulators in operation, making policies and ensuring their implementation are an onerous responsibility. If a policy is made and the regulator has a different view on its implementation, then DEA officials have a tough job.
Similarly, DEA officials in the 1990s worked mainly on initiating basic reforms. Today, the challenge is to fine-tune those reforms and the challenge is much more daunting. And as the finance minister pointed out, in the 1990s there were several brilliant officers who led a simple life.
Today, there are several brilliant officers, but many of them lead an ostentatious lifestyle. For Subbarao, the bigger challenge, therefore, is to persuade his officers to curb ostentation without losing sight of the long-term goal of achieving sophisticated reforms.
