Gautam Pingle Former Dean of Research at Administrative Staff College of India, Hyderabad
After reading Dr Y V Reddy’s autobiography Advice and Dissent, one is tempted to set it in the context of the superior civil service itself. Recruits to the Indian Administrative Service are selected on the basis of a set of written examinations and a cursory interview.
It was hoped that the initial training at the Academy would be sufficient to broaden the capacity of the probationers to enable them to administer the state and, in a sense, to govern the land and its people. The fact that many of the candidates selected have professional postgraduate education in various branches is not taken into account in their subsequent career as civil servants. Not only does the civil service not build on these foundations laid by the recruits themselves, it destroys the professional talent acquired and substitutes it with a generalist training.
The Indian Administrative Service has two functions: policy implementation and policy design. The capacity to carry out both these functions is rarely found in a single person—for good reason. Implementation of policy requires knowledge of rules, regulations, program conditions and identification of beneficiaries. It also requires hard, repetitive and boring work. Leadership qualities are required for building a team made up of subordinate bureaucrats. This application of method is fundamental to the proper and effective implementation of policy.
However, in implementing policy, most IAS officers are subjected to directions from elected representatives with the real threat of transfer if such directions are ignored. In that sense, IAS officers are not servants of the people but are in the service of politicians. This creates a tension both in the personality of the individual IAS officer and also in the general public perception towards the IAS.
On the other hand, policy design requires gathering of relevant and credible data, analysis of alternatives in the current context, identifying policy limits, estimating the costs of policy and selecting the timing for initiation. Elsewhere, Dr Reddy tersely stated his cardinal concepts relevant to policy: Samayam, sandharbham, haddu, paddu and lokagyanam. But application of these concepts to policy design needs trained minds.
A very small number of IAS officers develop trained minds and resultant analytical skills. This is due to their inherent nature, family conditioning, professional education and erudition. These skills, while being near useless in the implementation of policy, come in handy in policy making.
Dr Reddy’s life as an IAS officer is illustrative of this analysis. The initial impetus of his career was a dynamic tension between the modest comfort of his parental home combined with an individual vision and ambition derived from his surroundings and perceived possibilities. Most IAS officers today find that their children decline to follow them into the service. Dr Reddy, in this respect, also veered off track in pursuing a promising academic career as an economist—both in teaching, research and in commencing a PhD thesis—before returning to follow his father’s career in public service.
His early experiences in the Andhra Pradesh state government seem largely commonplace and apparently without any great satisfaction to him or anyone else as indicated by his many short truncated field-level postings. Fortunately, he was found eminently suitable in planning at state level, in economic policy at the national level, in international finance at Washington and eventually, in central banking at its ‘commanding heights’. His experiences as a central banker have been phenomenal, substantial and highly satisfactory to him and to those who closely observed his activities.
There is hardly anything new in central banking. However, in India, the Reserve Bank lacks a constituency to support it. RBI Governors, therefore, need character, courage and determination to carry through policy while risking professional setbacks and adverse comments. When the Reserve Bank sets interest rates, determines the rate of inflation and fixes the exchange rate, it directly affects the distribution of income and wealth between different classes of citizens. It is, therefore, hardly likely that the political executive or the legislative arm of the state will allow the Reserve Bank the freedom of action that is advocated in certain quarters.
In this context, recall the response of Russian President Vladimir Putin to a question about the adversarial relationship between his chief economic adviser Sergey Glazyev, and the Russian Central Bank: “The Central Bank is not very happy with him and he is not very happy with the Central Bank. It is normal.”
One of the most important regulatory functions of the Reserve Bank is to safeguard deposits placed by citizens in the banking system. Given the extensive and enormous non-performing bank loans made to crony capitalists from public deposits, there has been lamentable failure by the RBI in this respect. Another failure has been the inability or unwillingness of the Reserve Bank to take effective measures against counterfeit currency. A third failure has been the consistent and systematic devaluation of the external value of the national currency.
This three-decade saga has been presided over by the Reserve Bank and the Finance Ministry. Unequal blame, of course, needs to be apportioned unequally. Given the character and behaviour of the finance ministers he served, Dr Reddy emerges with some credit.It is reported that Chinese emperors used to cut off the head of their finance ministers if the annual results did not come out as projected. Dr Reddy, on the other hand, would have probably received the hand of the emperor’s daughter in marriage. The memoir is worth reading.