Lateral Entry from Private Sector

In News

Recently, the government has selected 31 specialists from the private sector as joint secretaries, directors and deputy secretaries in central government departments.

Background

• The Ministry of Personnel, Public Grievances and Pensions had, in June 2018, invited applications for 10 joint secretary-rank posts through lateral entry mode — that is, appointment of private sector specialists in the government — for the first time.
• This policy is about inducting the private sector in Governance so as to have better efficiency.

What is Lateral Entry?

• The term lateral entry means the appointment of specialists and experts, mainly those from the private sector, in government organizations and ministries. 
• Aim: To recruit outstanding individuals, with expertise in revenue, financial services, economic affairs, agriculture, cooperation and farmers’ welfare, road transport and highway, civil aviation, commerce among many other sectors to serve for the benefit of the country.
• Right talent for the right role is the principle behind it.

Perks of Lateral Entry

• These lateral entrants into the civil service will be offered a three-year contract, which the government can extend to five years depending on performance.
• The highlight of this announcement is the salary these lateral entrants will receive — Rs 1,44,200 to 2,18,200 per month. These are seemingly competitive salaries. 
• Making matters better for potential candidates is that they shall be eligible for all government-mandated perks – for example, transport, accommodation and reimbursement of expenses. 

Lateral Entry: Pros

• Specialisation: 
  • The lack of specialisation across the top tier of Indian bureaucracy is a concern that has remained unaddressed until now.
• Seasoned Professionals:
  • IAS officers get recruited at a very early age via the UPSC exams. 
  • It is difficult to gauge their administrative judgement and capabilities then. 
  • Allowing for lateral entry of seasoned professionals and experts into the service makes up for this deficiency.
• Filling The Gap: 
  • According to Department of Personnel and Training data, there is a shortage of about 1500 IAS officers. Lateral entry can help bridge this deficit.
• Alternative to meritocracy:
  • Career promotions in the IAS move seamlessly with few impediments along the way. 
  • Attempts to introduce ‘meritocracy’ haven’t quite worked out. 
  • Bringing in experts from the professional sphere is expected to shake the IAS out of their comfort zone.
• Participatory Governance: 
  • Presently, governance is becoming a more participatory and multi-actor endeavor. 
  • In this context, the lateral entry provides stakeholders such as the private sector and non-profits an opportunity to participate in the governance process.
• Dynamic Bureaucracy is needed:
  • It became more critical for the government to ascertain the impact its policy decisions have on various stakeholders such as the private sector, non-profits, and general public, i.e. those who have experienced government from the outside.
• Some good case study prevail:
  • This isn’t the first time that the government brought in professionals from the private sector or academia into the top tier of government. 
    • For example, the Finance Ministry, Reserve Bank of India and even the current NITI Aayog, which have hired the likes of Raghuram Rajan, Arvind Subramanian and Arvind Panagriya to name a few.

Lateral Entry: Cons 

• Private and Public work culture:
  • Lateral entrants from the private sector and academia may not work well with the bureaucracy. 
  • The same pretty much goes for any inter-sector scenario. 
  • Differences in work culture, turf wars and systemic inertia often come in the way.
• Privilege v/s Merit:
  • One of the distinguishing aspects that the current crop of IAS officers made through probably the hardest open competitive exam in the world and can hold up is their experience in the field, serving some of the poorest districts in our hinterlands. 
  • Those entering from privileged backgrounds and the private sector may have never seen a village school.
• Profit Motive vs. Public Service: 
  • Private sector approach is profit-oriented. On the other hand, the motive of the Government is public service.
  • This is also a fundamental transition that a private sector person has to make while working in government.
• Expertise Available: 
  • There is a difference between bringing expertise and being part of the decision-making process.
  • For bringing expertise, the government doesn’t strictly need to hire private-sector personnel. 
  • Expertise is widely available and used by almost every ministry — expert committees, consultations, think tank engagements, etc.
• Exploitation of Newcomers:
  • It’s important to gauge what processes the Centre has put in place to ease the transition and establish authority. 
  • Candidates coming from the outside may not know the nuances of the system which can be exploited against them in any number of ways.
• Transparency in Recruitment: 
  • One of the many reasons for the opposition against lateral entry recruitment is the transparency of the lateral entry process. 
  • It is essential to select the right people in a manner that is manifestly transparent. 

Second ARC and other recommendations on Lateral Entry

• Sector Specialists: The second ARC headed by M. Veerappa Moily in 2008 proposed a plan to bring in sector specialists from various spheres into senior administrative positions in the government.
• 10th Report: In its tenth report Refurbishing of Personnel Administration, the ARC recommended that:
  • At higher levels of government, lateral entry from the private sector should be introduced to encourage competition for the selected posts.
  • It also underlined the need to check the free flow of civil servants to the private sector for brief periods, asserting that it could result in serious conflict of interest.
  • Creating a senior management or leadership pool in the government, competition could be infused through two main mechanisms, one of which would be to open up the senior management cadre to all existing services. 
  • The other stream that it suggested was through lateral entry by opening the senior management cadre to aspirants from the private sector, who, it said, would bring new skills into government.
  • It had, however, also warned that lateral entry as done in the past on an ad hoc basis should not continue and the process should be ‘institutionalised’.
  • It had also laid down a roadmap for lateral entries, saying the Central Civil Services Authority should be entrusted with the task of identifying the posts at higher management level where induction of outside talent was desirable.
• Other recommendations 
  • Remote areas experience:
    • The lateral entrants should have mandatory ‘district immersion’, serving at least five of their first ten years in field postings. 
    • The hard grind of such field postings will make lateral entry self-selecting, drawing in only those with commitment and aptitude.
  • Setting Objective Criteria: 
    • There are several joint secretaries in each ministry who handle different portfolios. If lateral entrants are assigned to an unimportant portfolio, there are chances that they will not be motivated.
    • A cursory look at the portfolios of the eight laterally-hired joint secretaries doesn’t suggest that they hold critical portfolios. That’s why one entrant has already quit.
    • Thus, what key skills, qualities, and experiences a particular role requires must be objectively decided.
  • Putting accountability:
    • The worst performing civil servants must be eased out of service after 15 years based of course on criteria that is both transparent and accountable. This will open up space for lateral entrants as well, leaving the IAS a little less top heavy.
  • Need for the Transparent Process: 
    • The key again to the success of this scheme would lie in selecting the right people in a manner that is manifestly transparent.
    • The constitutional role of UPSC should not be ignored as it will provide legitimacy to the entire process of selection 

Way Ahead

• The government can consider lateral entry to head certain pre-identified mission-mode projects and public-sector entities where private-sector expertise actually matters. 
• It should be a mix up of both private sector and civil servants.

Sources: IE