Understanding Lateral Entry in Civil Services | UPSC

Introduction

• The concept of lateral entry into Indian government services has been a subject of significant interest and debate.
• Recently, the Union Public Service Commission (UPSC) issued an advertisement to recruit 45 joint secretaries, directors, and deputy secretaries across 24 central ministries through lateral entry on a contract basis or deputation.
• However, the announcement quickly drew criticism from various stakeholders, including opposition leaders.
•  In response, the Central Government has asked the UPSC to cancel the recruitment process, citing concerns over social justice and representation.

What is Lateral Entry?

• Lateral entry refers to the recruitment of professionals from the private sector into middle and senior management positions within the Government of India.
•  This initiative aims to inject specialized skills and domain expertise into the bureaucracy, which may not be adequately available within the traditional cadre of civil servants. 
• Lateral entrants are primarily appointed to the positions of Joint Secretary, Deputy Secretary, and Director within the Central Secretariat, traditionally occupied by career bureaucrats from the All India Services and Central Civil Services. 
• These appointments are made on a contractual basis, typically for a duration of three to five years.

Background of Introduction

• Constitution Review Commission (2002): The Commission advocated for lateral entry, suggesting it could help specialize certain generalist roles by introducing professionals from the private sector.
• 2nd Administrative Reform Commission (2005): This Commission recommended an institutionalized and transparent process for lateral entry at both the Central and State levels. It highlighted the need for fresh talent in the bureaucracy to enhance governance and policymaking.
• NITI Aayog’s 3-Year Action Agenda: NITI Aayog supported lateral entry, emphasizing that it could improve governance by incorporating specialized knowledge from the private sector.
• Sectoral Group of Secretaries (SGoS) on Governance: This group endorsed lateral entry, arguing it could enhance public service effectiveness by introducing professionals with relevant expertise.

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Implementation of Lateral Entry in India

• The Union Public Service Commission (UPSC) is responsible for advertising vacancies for lateral entry. After a rigorous selection process, suitable candidates are recommended for appointment. Notably, 63 appointments have been made through lateral entry over the past five years.
• 2018: The first round of lateral entry was initiated, with nine individuals selected for Joint Secretary-level posts in various Ministries and Departments.
• 2021 & 2023: Subsequent rounds of lateral entry were conducted, further expanding the initiative.

Rationale Behind Lateral Entry

Need for Specialists and Fresh Talent: 

• • Generalist civil servants often lack domain-specific knowledge, particularly in technical fields like finance, infrastructure, and technology. 
  • For example, the appointment of Arvind Subramanian as Chief Economic Advisor brought in critical economic expertise that significantly shaped India’s economic policy, especially during the implementation of the Goods and Services Tax (GST). Such appointments invigorate the bureaucracy with new ideas and approaches that traditional career bureaucrats might not possess.

Addressing Personnel Shortages:

• •  The Baswan Committee (2016) highlighted the reluctance of states like Bihar, Madhya Pradesh, and Rajasthan to sponsor officers for central deputation due to their own staffing shortages. 
  • This issue was evident during the implementation of central schemes like the Pradhan Mantri Awas Yojana (PMAY), where a shortage of personnel at the central level slowed down progress. Lateral entry can mitigate such shortages by bringing in experienced professionals from outside the traditional civil service cadre.

Strengthening Participatory Governance: 

• • By allowing private sector and NGO professionals to participate in governance, lateral entry creates a more inclusive government structure. 
  • The involvement of Parameswaran Iyer, a former World Bank official, in the Swachh Bharat Mission, is a prime example. His experience in global sanitation projects helped scale the program quickly, making it one of the largest cleanliness drives in the world.

Improving Governance Efficiency: 

• • Previous appointments of private individuals as consultants have yielded positive results. 
  • For instance, Nandan Nilekani, co-founder of Infosys, played a pivotal role in the successful rollout of the Aadhaar program, which streamlined various public services and welfare schemes, reducing leakage and improving governance efficiency.

Rectifying Public Service Recruitment Flaws: 

• • Lateral entry offers a platform for talented individuals who missed out on traditional civil service exams to contribute later in their careers.
  •  The appointment of former Reserve Bank of India (RBI) Governor Raghuram Rajan as the Chief Economic Advisor is a case in point. His deep understanding of global economics helped navigate India’s economy through global financial challenges.

Promoting Healthy Competition:

• •  Lateral entry can spur generalist civil servants to specialize in their chosen fields, fostering a competitive spirit within the bureaucracy. 
  • For example, the entry of private sector professionals into the Ministry of Finance has led many career civil servants to pursue advanced degrees in economics and finance to stay competitive.

Bridging the Public-Private Gap: 

• • Post-1991 economic reforms have seen the Indian government take on a facilitative role, with the private sector playing a larger part in capital expenditure and development. 
  • Lateral entry helps bridge the gap between public and private sectors, as seen in the collaboration between the government and private sector experts during the implementation of the Digital India initiative, which accelerated digital infrastructure development across the country.

Alignment with Global Practices: 

• • Countries like the United States, the United Kingdom, Australia, and New Zealand have institutionalized lateral entry as a permanent part of their systems.
  •  In India, similar practices have been followed, like the appointment of Sajjid Chinoy, an economist from JP Morgan, to the Prime Minister’s Economic Advisory Council, bringing in international expertise to advise on economic policies.

Criticisms of Lateral Entry

Ambiguity in Recruitment Process: 

• • Concerns exist about the lack of transparency in the recruitment process, including vacancy determination, candidate shortlisting, and evaluation procedures. 
  • For example, the selection of lateral entrants in 2018 faced criticism for the perceived lack of clarity in the criteria used by the UPSC, leading to doubts about the fairness of the selection process.

Sidelining of Reservation Policy: 

• • The absence of reservation provisions for SCs, STs, and OBCs in lateral entry appointments has led to criticism. 
  • For instance, during the 2019 round of lateral entry appointments, there was significant backlash from marginalized communities over the non-implementation of the 13-point roster system, which could potentially exclude deserving candidates from these communities.

Lack of Familiarity with Bureaucratic Processes: 

• • Lateral entrants, unlike career civil servants, may struggle with the bureaucratic protocols and processes.
  •  This was evident in the case of some lateral entrants who faced difficulties in navigating the complexities of government procedures, leading to delays in project implementation. 
  • An example can be drawn from the challenges faced by certain private sector appointees in understanding the intricate workings of the Ministry of Rural Development.

Short Tenure and Limited Impact:

• •  The contract-based nature of lateral entry positions, typically for three to five years, may not allow enough time for lateral entrants to fully assimilate and deliver optimal results. 
  • For instance, some of the 2018 appointees found it challenging to make a significant impact within their short tenure, leading to questions about the effectiveness of such appointments.

Potential Conflict of Interest: 

• • There is a risk that lateral entrants from the private sector may prioritize profit maximization over public service, leading to conflicts of interest in policy formulation. 
  • For example, concerns were raised when some lateral entrants with backgrounds in industries regulated by the departments they joined were seen as potentially biased towards industry interests.

Discouraging for Motivated Civil Servants: 

• • Large-scale lateral induction could demotivate existing civil servants by implying that the current bureaucracy is not competent enough to manage government functions. 
  • This concern was particularly voiced by officers in key ministries like Finance and Commerce, where the influx of lateral entrants was seen as undermining the expertise and experience of career civil servants.

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Way Forward

• Maintaining a Balance: The government should ensure a balance between career civil servants and lateral entrants, keeping the number of lateral recruits optimal and minimal.
• Phased Implementation: Lateral entry should be implemented gradually, with feedback and outcomes from initial recruitments guiding future appointments. This will help ensure smooth and effective integration of private sector professionals.
• Implementing Reservation Policies: The government should consider applying the 13-point roster system to lateral entry positions to address concerns from SC, ST, and OBC communities.
• Clear Recruitment Rules: The recruitment and service rules for lateral entry positions should be clearly defined, including potential entry-level tests to assess analytical skills, judgment, and personality traits.
• Facilitating Assimilation: Greater weight could be given to candidates with prior consultation work with the government, as they may find it easier to assimilate into the bureaucratic structure.
• Restricting to Technical Sectors: Lateral entry should be limited to technical sectors like finance, economy, and infrastructure, avoiding areas such as Home, Defence, and Personnel.