Look no further for the roots of policy paralysis. Here is why senior officials don’t know whether to take a call or answer the call of conscience
Mukesh Kacker | December 18, 2012
These are troubled times for the once celebrated steel frame of the country. Governance has virtually collapsed and a large part of the blame is being laid at the doors of the civil services. Corruption charges are flying thick and fast and there is a general perception that the neta-babu-businessman combine has been able to manipulate the system to serve its vested interests. A number of senior officers belonging to premier services like the IAS, IRS (Customs) and IRS (IT) are either in jail or out on bail.
In the resultant climate of distrust and fear, decision making has been the first casualty. Those sitting in positions of authority have started thinking that since inaction does not invite any penalty while proactive action may sow the seeds of future troubles, a policy of either not doing anything or always erring on the side of the government, even though it may be totally misplaced, is the best policy to follow.
This mistaken inference is putting insidious shackles on the growth of the country and inflicting unimaginable damage on our self esteem and overseas image. The civil servants, however, have a point. What protection does an honest and well meaning civil servant have in this climate of media trial and public conviction before enquiry? Let me place before you the predicament of Mr X, a very senior civil servant, occupying a sensitive position in policy/decision making.
In 2010, X, an IAS officer with 31 years of service, got posted to the department of commerce in the ministry of commerce & industry, government of India, as the director general of foreign trade (DGFT). This is an additional secretary level position, in charge of administering the foreign trade policy of the country. Officers at this position spend only two-three years before getting promoted as secretary to government and a single indiscretion at this stage, particularly in independent positions like the DGFT or the DGCA (director general civil aviation) may mar the prospects of an officer of becoming secretary.
The first few months of X, in this position, were spent in relative comfort as no tricky issues cropped up and most cases were handled by the army of additional, joint and deputy DGFTs working under him. He also seemed to enjoy the media attention focused on him when the new foreign trade policy was unveiled. Interestingly, it was the new foreign trade policy that changed the relaxed and laidback atmosphere in his office and brought him face to face with dangers which he had not encountered so far in his service. As the last couple of years had not been good for exports and the negative trade balance had further deteriorated, the commerce minister, a political heavyweight with ambitions of capturing the finance portfolio in the next reshuffle, had introduced new ideas with a view to giving favourable treatment to trade in several areas. The prime minister, battling an intensely adverse image, also gave him a free hand in introducing those changes. The industry associations welcomed the changes and for more than a month either the minister or X was seen lecturing gatherings of industrialists and businessmen at events organised by Ficci, CII, Assocham, PHDCCI and others.
Unfortunately, the changes that were welcome in perception, gave rise to tremendous problems in interpretation. The administration of the foreign trade policy is inextricably linked with the import duty regime which is controlled by the department of revenue in the finance ministry. The changes in the trade policy brought to the fore many grey areas where a favourable treatment would entitle products to a lower import duty structure.
Immediately after the excitement over the new policy had died down and different industrial sectors had had sufficient time to study it thoroughly, the DGFT’s office started getting petitions either from individual companies or from associations for favourable treatment of specific products in the light of the new trade policy. One such petition came from one of the richest industrialists in the country, who also happened to be the chairman of the trade/investment commission appointed by the prime minister’s office (PMO). A few days later this prominent industrialist paid a visit to the commerce minister to lobby for his demand. The commerce minister called X to his room for discussions and both felt that the request was logical and acceptable under the new policy.
X, a hardworking and diligent officer, then held consultations with his deputies and all of them were of the opinion that this was a straightforward case. X could have sent the proposal into administrative tailspin by referring it to law or finance but felt it was his moral duty to actively administer the new policy that he had co-authored. The first signs of trouble surfaced when the DGFT’s office received a missive from the department of revenue saying that it was opposed to the contention of the petitioner, which, if accepted, would lead to a considerable revenue loss. The current account, the letter went on to say, was in deficit and the country could ill afford to lose revenue from application of lower import duties.
X smiled at the ironical situation. Both the department of commerce and that of revenue were on the same page as far as their objectives were concerned. While commerce was worried about the negative trade balance, revenue was worried about the current account deficit. But there was such a glaring chasm between their respective approaches. While commerce wanted to encourage exports by giving favourable treatment to related imports, revenue was stuck on the perceived loss from imports without thinking about the improvement in export earnings that it would engender.
X again had a meeting with the commerce minister, this time in the presence of the commerce secretary, and all three felt that the approach of the department of revenue was unjustified. X was also instructed to meet the cabinet secretary and the principal secretary to the PM, who had independently contacted the commerce secretary to enquire about the progress in the matter. X was told by the principal secretary to the PM that the PM was greatly concerned about the image of the government before the business community and that a liberal interpretation in the instant case would send a very positive signal. X took this to mean that the PM and his secretariat were with him on this issue. Although X’s friends in the civil service cautioned him against taking things at their face value, X was convinced that he had the requisite support on an issue which was justified, correct and backed by policy. The DGFT’s office, in due course, issued the order accepting the petition of the leading industrialist, allowing him to take advantage of the lower import duty regime on a vast range of products.
A few weeks later, while a prominent English news channel broke the story of a ‘foreign trade scam’, an anti-corruption NGO filed a PIL in the supreme court alleging large-scale corruption by DGFT in favouring a prominent industrialist. The PIL petition also mentioned the divergent view held by the department of revenue and annexed its letter with the petition. It was rumoured that the rival industrial groups who had been unsuccessful in getting similar treatments from the DGFT were behind this PIL.
Things moved so quickly hereafter that X found himself neck deep in trouble even before he could recover. The supreme court ordered a CBI inquiry in the case and the CBI promptly filed an FIR alleging loss to the state exchequer, with X as the main accused. The CBI took the statements of the commerce minister, commerce secretary, cabinet secretary and the principal secretary to the PM but it is not known as to why their support could not get X exonerated.
X also sought an appointment with the PM who, though extremely apologetic, could not offer any concrete protection to him. Two months later the CBI formally asked the department of personnel and training, which functions under the PM, to grant sanction for prosecuting X under the Prevention of Corruption Act, 1988.
X was heartbroken and disillusioned. He had done nothing wrong. On the contrary, he had done his duty and acted in national interest. Yet, here he was, on the verge of being prosecuted and jailed.
What do you think are the chances of the department of personnel denying the grant of prosecution sanction to the CBI? Will the PM have the spine to stand by his officer and write a speaking order refusing to grant sanction to prosecute X? If the PM agrees with X then what prevents him from instructing the attorney general to tell the supreme court that X’s action stands endorsed by the entire government? And if the government cannot protect its well meaning officers then will anybody be willing to take decisions, leave alone risky decisions?
I do not have the answers to these questions and neither do the officers that serve the government today.
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