A necessary reform 

A necessary reform 

Context

Eliminating conflict of interest

Author’s contention

Author contends that there is a need for removing discretion and codifying the conflict of interest inherent in having senior bureaucrats assuming corporate roles post-resignation or retirement

Conflict of interest

Vested interests have increasingly captured regulatory boards — consider the case of the Food Safety and Standards Authority of India. This regulator is theoretically supposed to be independent in monitoring food safety and yet, until 2014, industry representatives were regularly been appointed to scientific committees

Official policy

• No codified mechanism: India has an official policy, regulated by the Ministry of Personnel, whereby senior bureaucrats have to seek permission for commercial employment after their retirement. However, such grants of permission within cooling-off period depend primarily on government discretion, with no codified mechanism.

There is nothing wrong in letting experienced bureaucrats utilise their expertise in the private sector — if adequate rules are framed and followed that enable the elimination of any conflict of interest 

What needs to be done?

There is a need of legislation that makes non-disclosure of a conflict of interest punishable

• As with E.M.S. Natchiappan’s private member’s bill (The Prevention and Management of Conflict of Interest Bill, introduced in 2012), the legislation ought to cover all arms of governance, including the judiciary, the legislature and the executive
• The recommendation of the Parliamentary Standing Committee on the Department of Personnel and Training (Report No. 60 dated May 3, 2013), calling for early retirement if interested in post-retirement private service is established, needs to be implemented
• Increase the cooling off period: The mandatory cooling period should be extended to five years so that no undue influence can be exerted by the retired bureaucrat. Also, the reasons for declining their requests for joining such firms need to be laid out clearly, to limit political concerns
• Public disclosure: A culture of transparency needs to be fostered. Public disclosure of their interests would clear the air, enabling their views to be given appropriate merit. An open, public data platform enlisting all post-retirement appointments of civil servants will increase transparency

Conclusion

Cleaning up business interests, and strengthening a moral code over such conflicts is needed. Without such transformation, India’s society, governance and its private sector will remain open turf for insider trading