📰 Fall in deputations to Centre in 2021
Only 10% mid-level IAS officers were posted with Union govt.
•Only 10% mid-level IAS officers were posted with the Union government in 2021, a sharp fall from 19% in 2014. The decrease in central deputation of IAS officers becomes even more stark as the total pool of such officers at this level expanded from 621 in 2014 to 1130 in 2021, an increase of around 80%.
•According to data available with the Department of Personnel and Training (DoPT), the number of central deputation reserve of IAS officers has gone down from 309 in 2011 to 223.
•A senior government official said on Thursday that DoPT’s proposal to amend Rule 6 (deputation of cadre officers) of the Indian Administrative Service (Cadre) Rules 1954 was necessitated as the number of officers available under Central Deputation is not sufficient to meet the requirement of Government of India (GoI).
•The Hindu reported on January 19 that four amendments are proposed that will enable the Union government to seek the services of an Indian Administrative Service (IAS), Indian Police Service (IPS) and Indian Forest Service (IFoS) officer posted in a State even without the State government’s consent. The Centre will be able to relieve an officer from their cadre if the State government does not give effect to the Central government’s decision within the specified time.
•The official stated that the existing rules did not have specific provisions to cater to situations when services of an All India Service (AIS) officer may be warranted in the Centre to meet specific situations such as a major disaster or national security. “Similarly, services of an AIS officer with a specific domain expertise may be required for any important time-bound flagship programme or project. The extant Cadre Rules do not have specific provisions to cater to such situations, which have now been proposed through these amendments,” the official explained.
•AIS officers are recruited by the Union Government and their services are placed under various State Cadres, and it is incumbent upon the members of service to serve both under the State and the Centre, said the official.
•The total strength of any cadre is calculated by including central deputation reserve (CDR), which is around 40% of the sanctioned posts.
•“However, a trend of decreasing representation of IAS officers up to joint-secretary level has been noticed as most of the States are not meeting their CDR obligations and the number of officers sponsored by the States to serve the Union government are much less than the reserve,” said the official.
•The CDR utilisation has gone down from 25% in 2011 to 18% presently.
•“In spite of increase of IAS officers at Deputy Secretary/Director level in IAS from 621 in 2014 to 1130 in 2021, the number of such officers on central deputation has gone down from 117 to 114 during the period,” said the official.
•The official asserted that the requirement from the States is only to sponsor adequate number of officers to be posted with the Centre. “The actual number of officers to be deputed here is to be decided only in consultation with the State government,” the official said. One of the proposed change is the Union will decide the actual number of officers to be deputed to the Centre in consultation with the State government and the latter should make available the names of such officers.
•Around 40% or 390 Central Staffing Scheme (CSS) posts are at joint secretary level (more than 19 years experience) and 60% or 540 such posts are at the rank of deputy secretary (nine years) or director rank (14 years of service).
Reservation not at odds with merit, says top court
•The Supreme Court on Thursday upheld the constitutional validity of quota for Other Backward Classes candidates in National Eligibility cum Entrance Test’s (NEET) All India Quota seats for undergraduate and postgraduate medical and dental courses,noting that “reservation is not at odds with merit” in open competitive examinations.
•“If open examinations present equality of opportunity to candidates to compete, reservations ensure that the opportunities are distributed in such a way that backward classes are equally able to benefit from such opportunities which typically evade them because of structural barriers. This is the only manner in which merit can be a democratising force that equalises inherited disadvantages and privileges. Otherwise claims of individual merit are nothing but tools of obscuring inheritances that underlie achievements,” a Bench of Justices D.Y. Chandrachud and A.S. Bopanna observed in a 106-page judgment.
•The court said an open competitive exam only ensures formal equality and does not end widespread ingrained inequalities in the availability of and access to educational facilities to certain classes of people, including the Other Backward Classes (OBC).
•“The privileges that accrue to forward classes are not limited to having access to quality schooling and access to tutorials and coaching centres to prepare for a competitive examination but also includes their social networks and cultural capital (communication skills, accent, books or academic accomplishments) that they inherit from their family,” Justice Chandrachud observed.
•The cultural capital ensures that a child from the forward classes is trained unconsciously by the familial environment to take up higher education or high posts commensurate with their family‘s standing. This works to the disadvantage of individuals from social backward classes who are first-generation learners and come from communities whose traditional occupations do not result in the transmission of necessary skills required to perform well in open examination.
•Thus, merit is not solely of one’s own making. “The rhetoric surrounding merit obscures the way in which family, schooling, fortune and a gift of talents that the society currently values aids in one‘s advancement. Thus, the exclusionary standard of merit serves to denigrate the dignity of those who face barriers in their advancement which are not of their own making,” Justice Chandrachud explained.
•The court said the “idea of merit” based on scores in an exam requires “deeper scrutiny”.
•“While examinations are a necessary and convenient method of distributing educational opportunities, marks may not always be the best gauge of individual merit. If a high-scoring candidate does not use their talents to perform good actions, it would be difficult to call them meritorious merely because they scored high marks,” Justice Chandrachud reasoned.
•The fortitude and resilience required to uplift oneself from conditions of deprivation are equally reflective of individual calibre and merit, the court said.
•The apex court held it was the Centre’s prerogative to provide reservation in All India Quota (AIQ) seats. Granting reservation in the AIQ seats was a policy decision of the government, though subject to the contours of judicial review similar to every reservation policy;
•The AIQ scheme was introduced in 1986 to provide domicile free admission to students from across the country. Till 2007, there was no reservation in the AIQ. The rationale behind the AIQ scheme was that selection of candidates for admission based on the all-India open examination would further merit since it would permit the selection of the best minds in the country.
•The increase in the number of medical seats over the years has favoured the AIQ scheme. In the last six years, MBBS seats in the country were increased by 56% from 54,348 in 2014 to 84,649 seats in 2020. The number of postgraduate medical seats were increased by 80% from 30,191 seats in 2014 to 54,275 seats in 2020. States like Tamil Nadu have relentlessly worked to provide OBC quota in AIQ seats.
•Justice Chandrachud said the power of the government to provide reservations under Article 15 (4) and (5) of the Constitution is not an “exception” to Article 15 (1), which enshrines the mandate that “the State shall not discriminate against any citizen on grounds only of religion, race, caste, sex, place of birth or any of them”.
•The court held that the power of the government to craft reservation for the OBC amplified the principle of “substantive equality” manifested through Article 15 (1).
•The Parliament had backed the cause by enacting the Central Educational Institutions (Reservation in Admission) Act 2006 to enable 15% reservation for Scheduled Castes, 7.5% for the Scheduled Tribes, and 27% for the OBC category. The Constitution Bench in Ashoka Kumar Thakur v. Union of India had also upheld the constitutional validity of 27% reservation for the OBC category provided under the 2006 Act.
•“Though the Act of 2006 would not be applicable to the seats earmarked for AIQ in State-run institutions since it would not fall within the definition of a Central educational institution under the Act, the Union, in view of Article 15(5), has the power to provide reservations for OBCs in the AIQ seats. It is not tenable for the States to provide reservation in the AIQ seats since these seats have been ‘surrendered‘ to the Centre,” Justice Chandrachud noted.
•The judgment was based on petitions filed by doctors in August 2021 against a July 29, 2021, notification issued by the Directorate General of Health Services of the Ministry of Health implementing 27% and 10% reservation for OBC and Economically Weaker Sections (EWS), respectively, while filling up 15% undergraduate and 50% postgraduate AIQ seats under NEET.
•The court further rejected the argument that Centre had issued the July 2021 notification, thus changing the “rules of the game” in the middle of the NEET admission process.
•The Bench said the information bulletin of February 23, 2021 had specifically noted that the reservation applicable in NEET would be made known only during the counselling process.
•“Thus, during the registration process which commenced on February 23, 2021 and ended on March 15, 2021, the candidates knew that the details relating to the seat matrix would only be available during the counselling process. The notification of July 29, 2021 was issued much before the exams were conducted and the counselling process was to begin,” the court concluded.
•This part of the judgment concerning the OBC quota provided in the July 29, 2021 notification is final. Questions on the validity of the 10% quota for the EWS would be heard finally in the third week of March.
•Meanwhile, on January 7, the court had allowed NEET counselling for 2021-22 admissions for AIQ seats to proceed in accordance with the July 29, 2021, notification in order to solely ensure there is no "dislocation" in medical admissions this year when the need for doctors is more due to the pandemic.
•The ₹8 lakh gross annual family income limit criterion for identifying EWS, as originally notified by a January 2019 official memorandum and recommended for retention by the government-appointed former Finance Secretary Ajay Bhushan Pandey-led Expert Committee on December 31, 2021, would be implemented for the admission year 2021-2022.
📰 Environment Ministry plan to rank States draws ire
It doesn’t intend to increase speed of clearances: officials
•A proposal by the Union Environment Ministry to “rank” and “incentivise” States on how quickly they could give environmental clearances to proposed infrastructure projects has drawn fire from environmentalists on the grounds that it contravenes basic principles of environmental regulation.
•A note to States by the Union Environment Ministry on January 17 spells out seven criteria to rate State Environmental Impact Assessment Agencies (SEIAA) on “transparency, efficiency and accountability.” On a scale of seven, an SEIAA, for instance, gets two marks for granting a clearance in less than 80 days, one mark for within 105 days and no marks for more. If less than 10% of the projects for scrutiny prompted a site visit by committee members, to examine ground conditions, the SEIAA would get one mark. More than 20%, on the other hand, would be a demerit or zero marks. SEIAA with a score of seven or more would be rated ‘five star.’
‘Violative proposal’
•The Legal Initiative for Forest on Environment (LIFE), a prominent environment organisation, described the proposal as “violative” of the Environment (Protection) Act. “A perusal of the criteria reveals that greater weightage is given for projects where due diligence is less....SEIAA members should sit in the confines of conference rooms and take decisions and earn high marks....The process ensures that the aim will be to clear projects at the shortest possible time. The task of the SEIAA is undertake a ‘detailed scrutiny’ whereas this notification makes them rubber stamp authorities,” a statement noted.
•Ministry officials told The Hindu that the ranking criteria was not intended to accelerate the speed with which clearances were accorded but to encourage the SEIAA to take quicker decisions on approving or rejecting a project, and adhere to timelines already specified by the provisions of the Act. “This system isn’t to reduce the time taken to decide on a project. If a SEIAA demands clarification, the time taken to respond won’t be deducted,” Leena Nandan, Secretary, Ministry of Environment and Forests, told The Hindu, “But SEIAA have been told earlier too that whatever clarifications they need must be compiled rather than repeatedly demanding them.”
•Sujit Bajpayee, Joint Secretary, Environment Ministry wrote in responses to The Hindu’s queries that the SEIAA “had complete freedom” to complete all the necessary due diligence “without worrying about the time line” and that States would not be negatively marked for not meeting ranking criteria.
•All proposed infrastructure projects above a certain size with a potential to significantly alter the natural environment must be first approved by an SEIAA, that consists of State officers and independent experts. Projects that are even bigger or involve forest land - called category A - must be cleared by a committee of experts constituted by the Centre. SEIAA projects are category B and relatively smaller though they make up the bulk of projects that are presented for approval. ‘B’ category projects include the bulk of building and construction, small mining, small industry projects and are considered to be ‘less polluting.’
Online process
•The project appraisal process is an online process where aspirant companies must upload documents on a portal called Parivesh.
•Kanchi Kohli, an expert on environment law and governance matters noted that the rating system “seriously limited SEIAA members from exercising their scientific, legal and administrative knowledge.” By stressing “quick and efficient clearance” the process undermined scientific rigour in the decision making process.
📰 Drop the IAS cadre rules amendments
States are right in perceiving the planned amendments to Rule 6(1) to be an infringement of their rights
•It was Sardar Patel who had championed the creation of the Indian Administrative Service (IAS) and the Indian Police Service (IPS) as “All India Services” (AIS) whose members would be recruited and appointed by the Centre and allotted to various States, and who could serve both under the State and the Centre. He considered the AIS essential to knit the administrative framework of a vast and diverse country into an integrated whole and to provide a connecting link between implementation at the field level and policymaking at the top. Speaking to the Constituent Assembly on October 10, 1949, Patel said, “The Union will go, you will not have a united India if you have not a good All India Service which has the independence to speak out its mind, which has a sense of security....”
Healthy conventions earlier
•AIS officers are made available for central deputation through a consultative process involving the Centre, the States and the officers concerned. In the past, certain healthy conventions were generally followed. No officer was sent on central deputation against his/her own will. Every year, the States would prepare an “offer list” of officers who had opted for central deputation without arbitrarily withholding any names. The Centre would choose officers only from among those “on offer” from the States. The States would relieve the officers picked up by the Centre at the earliest.
When politics intruded
•Unfortunately, both the Centre and the States have at times flouted these healthy conventions for political considerations. In July 2001, the Centre unilaterally “placed at its disposal” the services of three IPS officers of Tamil Nadu cadre. In December 2020, the Centre did the same in respect of three IPS officers of West Bengal cadre. In May 2021, the Centre unilaterally issued orders for the central deputation of the Chief Secretary of West Bengal just before his last day in service. In all these cases, the States concerned refused to relieve the officers.
•Some States used to vindictively withhold the names of some of the officers who had opted for central deputation or delay their relief after they were picked up by the Centre. An egregious example was that of a senior IPS officer who was not allowed to join the Central Bureau of Investigation despite earlier clearance and was suspended by the Government of Tamil Nadu in May 2014 when she relieved herself from the State pursuant to the Centre’s direction.
•The Central Government has proposed four amendments to Rule 6(1) of the IAS (Cadre) Rules, 1954 dealing with deputation, and has sought the views of State governments before January 25, 2022. The existing Rule 6(1) states that a cadre officer may be deputed to the Central Government (or to another State or a PSU) only with the concurrence of the State Government concerned. However, it has a proviso which states that in case of any disagreement, the matter shall be decided by the Central Government.
•Two of the four proposed amendments are disconcerting.
•One is a new proviso making it mandatory for the State government to provide a certain fixed number of IAS officers for central deputation every year. The proposed amendment more or less compels a State government to offer IAS officers for central deputation even when these officers themselves may not wish to go on central deputation. Poor working conditions in junior-level posts, an opaque and arbitrary system of empanelment for senior-level posts, and lack of security of tenure at all levels are the real reasons for the shortage of IAS officers, which the Centre should address. With the Government of India itself enthusiastically promoting lateral entry to posts in the Centre and providing an increased share of central deputation posts to the central services, there is no need to push unwilling IAS officers on central deputation.
•The other is a proviso that requires the State government to release such officers whose services may be sought by the Central Government in specific situations. Based on experiences of the recent past, State governments have a justified apprehension that this proviso may be misused for political considerations. What if the Centre unilaterally places at its disposal the services of the Chief Secretary, Principal Secretary to the Chief Minister and other key officers of a State ruled by a rival party or deputes them to other States?
Long-term damage
•States are right in perceiving the proposed amendments as a serious infringement of their rights to deploy IAS officers as they deem best, especially when the cutting edge of policy implementation is mostly at the State level. The contemplated changes have grave implications for the independence, security and morale of IAS officers. If States begin to doubt the loyalty of IAS officers, they are likely to reduce the number of IAS cadre posts and also their annual intake of IAS officers. They may prefer officers of the State Civil Services to handle as many posts as possible. In course of time, the IAS will lose its sheen, and the best and the brightest candidates will no longer opt for the IAS as a career. Short-sighted decisions can do long-term damage to the polity.
Think cooperative federalism
•In the words of jurist Nani Palkhivala, “A national consensus should clearly remind the Centre that it has not inherited the Viceroy’s mantle of paramountcy... The Centre would have no moral authority to govern unless it displays a sense of constitutional morality, particularly a sense of justice and fairness towards the States”. In S.R. Bommai vs Union of India (1994), the Supreme Court held that “States have an independent constitutional existence and they have as important a role to play in the political, social, educational and cultural life of the people as the Union. They are neither satellites nor agents of the Centre”.
•We hope that the Centre will heed Sardar Patel’s sage advice and drop the proposed amendments. In a federal setup, it is inevitable that differences and disputes would arise between the Centre and the States. But all such quarrels should be resolved in the spirit of cooperative federalism and keeping the larger national interest in mind.
📰 Should the government loosen its purse strings?
As inflation is driven by supply-side factors, tax policy can be used to cushion its impact
•With the Union Budget 10 days away, many economic observers are now focused on what support the Centre can offer the economy, which is still struggling to recover from the pandemic. Some analysts believe that the government must keep its spending in check to prevent price rise from getting out of control. Retail inflation is hovering close to 6%, while the wholesale inflation rate is in double digits. Other analysts, however, believe that the current rise in prices is a temporary phenomenon, and that the government must ignore the fiscal deficit and ramp up spending to support the ailing economy. In a conversation moderated by Prashanth Perumal J., N.R. Bhanumurthy and Himanshu discuss the way forward. Edited excerpts:
What is your view on the current trend in price inflation?
•N.R. Bhanumurthy: First of all, when it comes to retail inflation, the latest reading says it is somewhere close to 5.6%. The Reserve Bank of India (RBI) has already predicted that it will remain below 6% by the end of March. However, many of us believe there are some upside risks when it comes to inflation and inflation expectations. This is for a couple of reasons. One, international oil prices have gone up to $87 per barrel this week. We also see that inflation pressure is building up across the world, especially in countries where there was a large fiscal stimulus. So, there could be the risk of transmission of international inflation to the domestic economy. But at the same time, one needs to really understand what drives this inflation. At least in the Indian context, supply-side constraints play a major role and this needs a different policy prescription. And I’m very sure that the RBI has many instruments to contain this inflation pressure. For the past three quarters, the RBI has been hitting bull’s eye when it comes to inflation forecasts, so I think when it says that retail inflation will be less than 6%, it’s likely to come true. With regard to Wholesale Price Index (WPI), I’ve been a little wary of this reading. You cannot have wholesale market prices and retail market prices diverging for a very long time. We generally expect the transmission between the wholesale market and the retail market to not be more than one or two months. But what we see now is a very prolonged divergence. We need to look at a little more in detail in terms of the coverage and commodities and all those things. We need to focus more on Consumer Price Index (CPI) and less on wholesale prices.
•Himanshu: We have to be very cautious in not just looking at inflation numbers in aggregate, but also what is driving inflation. I think that most of the inflation is basically driven by supply. Also, it not driven as much by domestic factors as it is by international factors. But domestic factors have added to the problem. The most obvious factor is that taxes on petroleum goods and services have increased. So, domestic factors have contributed to inflation, but the inflation is predominantly driven by the supply side. But I would also be a bit hesitant in saying that there is only little that can be done using fiscal policy.
•Second, I think the gap between WPI and CPI is quite a big one and it has been so for a long time. Some of the inflation in wholesale prices will be passed on to consumer prices, so inflation is a cause of concern not just for fiscal policy or monetary policy, but also for the overall health of the economy because inflation is going to impinge on the basic economics of households.
How do you see the role of fiscal policy in supporting the economy in a high-inflation environment?
•N.R. Bhanumurthy: With regard to the fiscal policy, the current year is turning out to be a very good year in terms of tax revenues. If you look at the last Budget, the government was focused on the medium-term perspective, while leaving short-term issues to the central bank. I’m hoping that the same macro framework will continue in the coming Budget. But at the same time, measures that were brought in to help the poor in terms of providing safety nets continue. Right now, the government has fiscal room and will want to focus on the social sector as well as medium-term growth prospects. Ultimately, the biggest stimulus would be any measure that provides more employment opportunities. Economic recovery has to be on a more sustainable basis rather than in the form of short-term spikes in growth.
•Himanshu: I think it should spend more. If there’s any time that the government should be spending more, it is now. One has to go beyond this obsession with managing the fiscal framework. If fiscal prudence leads to growth slowing down, I don’t think that is something sustainable. The reason I say this is because there are enough of the government’s own economic indicators that show that there is excess capacity in the economy. Aggregate consumption, which is a big part of GDP, is slowing down and has been for quite some time now. I think at this point of time the focus should be on reviving the economy and that is best done using fiscal policies. The government will have to open its purse, not just in terms of improving the incomes of people in cases where it can directly do so, such as using social security schemes, but also by increasing the transfers to States. We are actually getting into a situation where the public debt to GDP ratio is going to increase because if growth is going to slow down, it would basically mean that government revenues will also slow down. So, I don’t see how it is going to be good fiscal policy if growth is going to be affected by fiscal prudence. I would recommend that we not worry about the fiscal deficit at this point of time because once growth picks up, then a lot of the fiscal issues can be taken care of. But if the economic engines are not firing up, you are getting into a vicious cycle, and then I don’t think any kind of fiscal management, either in the short or in the medium term, is going to be sustainable. So, I think we need the government to play the important role of reviving the economy.
How would you answer people who talk about the risk of stagflation?
•N.R. Bhanumurthy: I think they are being alarmist for a simple reason. We, at least in India, have a consensus that the right inflation number which is relevant for the household is the retail inflation number. The WPI is a very segmented indicator that doesn’t include services and other things. So, let’s be clear that if we are to look at one number to gauge inflation, it is CPI inflation. And the CPI inflation is well within the RBI’s targeted range of 2% to 6%. When it comes to the faltering Index of Industrial Production (IIP) numbers, it should be noted that the IIP covers a very small component of the industry. The IIP is a very crude leading indicator. So, I don’t think we need to make a judgment based on IIP numbers. My own assessment is that we are nowhere near stagflation. In fact, for the next financial year, my own prediction for GDP growth is somewhere close to 6.5%-7%. And if we look at exports, there is a very substantial rise in exports, so the recovery seems to be very, very sharp. If we can continue with the kind of fiscal framework that was adopted in the last Budget, I think we should be looking at close to 7% GDP growth for the next year. And as we already discussed, the inflation pressure is definitely there. It may be somewhere close to 6%. So, I would not really support the argument that we are anywhere close to stagflation.
•Himanshu: Stagflation may be too strong a word, but I think there are certainly pressure points. Inflation and low growth persisting for a long time is something that I don’t think we can rule out completely. Where I disagree with Bhanu is with his optimism as far as growth prospects are concerned. At least when it comes to the economic numbers that I can see, it’s not something that is going to be very easy to deal with. A lot of the inflation right now is still coming from the supply side. But if the economy does bounce back once the pandemic is over, it’s not going to lead to the softening of inflation; it may actually aggravate the inflation situation.
•Second, as far as the growth numbers are concerned, again, I’m not so optimistic. I’m not going to make a prediction on the growth numbers for next year because in this crisis situation, most of these numbers are affected by the base chosen to calculate these numbers. I think it will be some time before we come back to a normal situation. Unless we are back in a normal situation, I think all these numbers don’t have much meaning; they are just bouncing up and down. In the broadest sense, the threat of high inflation and low growth persisting for at least some time is real. A lot depends on how the government responds to the situation, both in terms of reviving demand in the economy, but also in terms of managing inflation. These are issues for which we still have no conclusive answers.
Is there something the Budget can do in terms of structural reforms to address inflation driven by the supply side?
•N.R. Bhanumurthy: I’m not really sure whether fiscal policy can directly address inflation driven by supply-side factors, except maybe by reviving growth. But to go back to an earlier point, if we look at the advance estimates of GDP, they suggest that the investment rate is somewhere close to 36%, which is very close to the investment rate during the high growth period that we saw in the last decade. This is one of the major indicators for me when I say we are going to see 7% GDP growth.
•Himanshu: There’s not much that the government can do. But what it certainly can do is protect demand, the economy, the middle class, and particularly the poor and the vulnerable from the impact of high inflation. That, I think, is the role of the government. Taxation of petroleum products, for instance, is something that is part of fiscal policy. So, that is something that the government can influence. When it comes to fertilizer prices, which are rising very fast, the government can increase its contribution and thus reduce the prices that the farmers are paying. Remember, the cost of inflation is not just a direct cost, it can also be passed on indirectly to other prices and this can have a very debilitating impact on the economy. The industry, such as the automobile sector, can start passing on its high input cost to the retail sector, that is to consumers. That’s where I think the government can actually step in and cushion the impact that high inflation has on industry as well as on consumers by lowering direct and indirect taxes. That’s something that will have an impact on what happens overall to the demand side and to the revival of the economy. So, I don't think that the government’s hands are completely tied; it certainly has a role to play. The government should be looking at the long-term picture rather than the short-term picture of generating revenues by taxing more. It should rather allow people to have a larger disposable income so that consumption in the economy increases. And one way to do it, other than through income transfers, is to reduce taxes on goods and services that are witnessing high inflation.
