NJ Kurian served as Adviser Financial Resources, Planning Commission. He retired as Additional Secretary to the Union government in 2004. Since 1968, he served in various capacities in addition to working as a consultant to World Bank and the Asian Development Bank. A renowned economist, he currently serves as the Chief Executive Officer of Council for Social Development, New Delhi.
With the boom in Indian economy, how important is the role of IES?
Even before it was formally constituted, economic advisers and economic officers were in key economic positions with the government. The entire planning process is driven by economists. The plan preparation, evaluation, plan review, everything has a major purpose. That is where economic service comes in. It is very significant. To an extent, other services, especially the IAS, do not allow economic service people to hold crucial positions, especially at senior levels. At the junior level, economists do work. They brief and acquaint senior officers. IAS officers play the role of an intermediary.
How do IAS officers hinder the IES?
If the IAS allowed the IES officers at higher positions, how would they have a larger-than-life role in the Central government? They would not have much to do other than the Home ministry or a few other central ministries. Most of the jobs in ministries are of an economic nature. At the most, IAS officers can only hold on to the Home Ministry or maybe a few other regulatory ministries. In the Law Ministry, lawyers do not allow them to take control. In Railway Ministry, the top people in railway run it their way. But in economic and social ministries, they have historically occupied top positions and the argument is that many of them also have a masters degree in economics. I would say there is a kind of alliance between politicians on one hand and IAS and IPS officers on the other hand.
Does this lead to frustration?
There was a lot of frustration but now it is less due to a comparatively more legitimate share to IES officers. Remember, it is not for the benefit of IES officers, it is for the benefit of better governance. Many IAS officers have political science, literature, botany and engineering as their backgrounds. How can they contribute to economy policy? They may be good as district collectors, but economic policy making is a different cup of tea. There should be no compromise. At the top, everything is decided by the Committee of Secretaries (COS) and 80 to 90 per cent of secretaries are IAS officers. It will continue to happen unless the Finance Minister or the Prime Minister is very particular about it. Former Prime Minister VP Singh recognised it and during his tenure, economic service cadres were given prominent posts, including the post of Joint Secretary. Around 11 Joint Secretary posts were created during his time.
Do IAS officers try to dictate economic reforms?
To an extent, yes. Politicians might have a significant say in economic reforms or policy changes, knowledgeable politicians like Jairam Ramesh and P Chidambaram can. As far as lesser ministries are concerned, IAS officers convince their ministers in their own ways. Before placing their cards, they may consult their juniors who have an economic background and then have policy papers or proposals designed to their own effect. Most often, junior officers toe the line laid out by their seniors.
Has the scenario changed since the post-reform period?
Compared to the pre-reform days, when the government had everything in their hands, in the post-reform scenario, the government will have less economic responsibility. The government has policies to regulate the economy and have it followed. It monitors and evaluates what is happening. Compared to pre-reform, economic executives play a much more important role now. Their significance has increased. The role of pure administrative services like IAS has decreased.
Can it be implied that the significance of IES officers has increased since then?
Yes, but at the same time the old equation of IAS officers playing the powerful roles they are accustomed to, has not changed. I would say there is a tussle because it is an unequal situation. Economic service officials cannot virtually fight with the IAS because they are so strong. The Union Cabinet secretary is from the IAS.
Why are Chief Economic Advisers not from the IES?
If I look around, I cannot find any IES officer who is as good as Kaushik Basu or Raghuram Rajan. And I do not mind if the Chief Economic Adviser is from outside the cadre as long as they effectively use the mechanism available to them. But if a competent economist is available, he should be considered seriously.
Could you share an incident in this regard?
I experienced something of this sort during my tenure. IK Gujral was the Prime Minister. When he visited his constituency in Jalandhar, he made two public announcements without consulting the Finance Ministry or the Planning Commission which is mandatory. It was regarding a loan waiver. The news even appeared in the newspapers the next day. Subsequently, the PMO asked Finance Ministry and the Planning Commission to examine the scheme that was announced. My counterpart in the Finance Ministry and I examined the proposal and said it was not viable. But to give some respect to the Prime Minister, we decided to waive off the interest payment for that year. We then recommended that this matter should be dealt by the Finance Ministry.
Ultimately the Finance Commission did not concede to the demands of the Prime Minister. Gujral went out of the way. He should not have made the announcements without consulting us. The second incident happened when he announced the setting up of a science museum in Jalandhar in memory of his mother who certainly was not a great scientist. We did not allow that. Then there was this case of a former Prime Minister who would always ask for more allocation to his constituency Lucknow. I would get instructions from the Deputy Chairman Commission to comply. There is nothing wrong in it. If the PM wants money for his constituency, it is okay. It is not as if he is siphoning it off himself. It is like a Railway Minister trying to keep his state and constituency in good humour.
Are junior rank officers in the IES able to ward off pressures?
Juniors are well protected in the system and they are not usually pressurised. Even if they are, their seniors are there to support and protect them. In any case, juniors cannot finalise policies. If at all there is pressure, it is for officers at the top, not juniors.
Do you keep in mind the demands of particular political parties in power while formulating your analysis and suggestions?
Not very much. The government changes, but the system, institutions, approach, everything remains more or less the same, except some very specific things. That is conveyed to the top. If there is something specific in the election manifesto of the party, it will need to be implemented. Nothing wrong in implementing a policy by an elected government. A Raja’s principal adviser RK Chandaulia was an economic service officer. He went out of the way to curry favour with the minister. In the process, he made big money. So there are cases of economic officers being posted as per political requirements. But otherwise, when the government changes, the policy changes. Basically, our job is to give objective advice. But often politicians indicate what they want.
Do officers in the service get to know about the scams before the media and people?
I will mention a specific incident to throw light on this issue. This relates to the Bihar fodder scam. In February 1997, the annual plan finalisation meeting was being held. Lalu Prasad Yadav, then Bihar CM, was coming for the meeting. The procedure was that states send their revised budget expenditure to the Planning Commission. It is sent by the Finance Secretary of the state. We have ways of cross examining the final accounts of the previous year. Bihar’s was handled by Renu Padma. She prepared the financial resources remissions (FRR) note. We estimate the previous year’s expenses based on that note. We estimate how much revenue was raised and what is the potential revenue to be raised in this year. In Bihar, during the previous 17 years, the actual planned expenditure was below the approved plan. That year we found that in certain sectors, specially animal husbandry, planned spending was much more than the allocation. There was a discrepancy. This lady in that note mentioned it very clearly. But she used some very strong words like ‘mismanagement in finances’. I asked her to tone down the language a bit while sticking to facts. Usually I trust these officers and sign. We then sent our views to the secretary. But Renu, against our advice, had retained some of the harsh words. The word ‘mismanagement’ continued to exist. So, when the Bihar Chief Minister, the Chief Secretary and their Finance Minister came, a planned discussion took place. It was a fairly pleasant discussion. Lalu Prasad at that time was very powerful, he was like the kingmaker during the Deve Gowda government. During the discussions, I did not talk about the discrepancies that existed as I did not want a controversy. The meeting was coming to an end and the Deputy Chairman stood up. We were all around the table. Then suddenly Lalu said, “Mujhe Kurian sahab se baat karni hai. Aap log thoda rukenge?” ( I have to talk to Mr Kurian, will you wait?). He then asked me ‘‘Kurian Saaheb, aapne kya kiya?’’ (what have you done?) I told him that I did not understand what he was referring to. Then he began to speak in English; he said, “In your note, you have indicated that there is mismanagement. Agar yeh akhbaar waalon ko mila toh?” (what happens if the media gets wind of this?). I told him that this was only an internal note and that I was sorry for the words used. He argued that we should not have criticised the state government’s financial management. But lo and behold, in less than six months, the fodder scam exploded. So, you can get a fair idea of how early we get to know of the scams.
How often do IES officers leak such information to the media?
During our times, it was not common to leak such information. But things have changed and information is much more readily available. With a booming media, now there are more than one source of information.