The Mandarin Makes His Move

ill the 1980s, cracking the Indian Administrative Service examinations was the dream of young men and women from both the established as well as aspirational middle class. Only a very few quit midstream, usually either for an academic course or career at a foreign university, or the lure of an even greater—and far better paid—bureaucracy in the United Nations.

But the brave new world of post-liberalisation India has changed all that. Now an increasing number of IAS officers—and indeed their colleagues in the Indian Revenue Service, Indian Railways, technocrats in NICNET, and government servants in the steel and telecom sectors—are heading out to the corporate sector, well before retirement. The recent hefty salary increases announced by the Pay Commission are unlikely to stem this exodus—they are still far behind the Rs 50 lakh to Rs 2.5 crore annual salaries that corporates are offering even mid-level government servants.

"Earlier, the government had a monopoly over the building of roads and ports, as builder and manager of power plants and provider of telephony services. But in the last 15 years," explains Union personnel secretary Satyananda Mishra, "the private sector has entered these areas in a big way, in some cases as a partner, using the PPP (private-public partnership) route." So when a private player wants personnel, Mishra notes, it has little option but to "poach" from government, which had been "doing these jobs, and therefore had the expertise".

If government has, then, become a happy hunting ground for the private sector, especially in the rapidly growing areas of infrastructure development, oil refineries and IT, it has been a bonanza for those civil servants with their sights set on the corporate sector, with its very attractive salary packages. The corporate sector may not have the "power and prestige" of the IAS—or at least what it used to have—but it certainly offers exciting new professional opportunities.

So what is the profile of those who are leaving government for the greener pastures of the corporate world? Take 1973-batch Maharashtra-cadre officer V.S. Dhumal who quit as state principal secretary, water supplies, in 2007, two years before his due retirement date, to become CEO, industrial infrastructure and logistics, K. Raheja Corporation. Or R.R. Sinha, a 1976-batch Maharashtra cadre officer who quit as state excise secretary in 2006 to join the private sector—he is currently a full-time director with the Adani group, where his background in the shipping sector in government as well as his professional degrees are coming of use. Or Rajiv Talwar, a 1978-batch UT-cadre IAS officer who quit as additional director general, Union ministry of tourism, in 2006 to head the hospitality and tourism division of DLF as group executive director: DLF's hospitality plans included an IPO of Rs 4,000 crore, and by 2015 it plans over 125 hotels in various segments, as well as service apartments. Talwar's background is, in a sense, more akin to the old-fashioned IAS officer—he's from Delhi's elite St Stephen's College. But Prabh Das, a 1981 West Bengal-cadre officer who has just quit after five years as joint secretary, ministry of petroleum, to head a Mittal-Hindustan Petroleum joint venture oil refinery in Bhatinda, is an electrical engineer from IIT Kharagpur. And then there is Anshu Bharadwaj, a 1992-batch Karnataka-cadre officer who resigned last year to set up a Bangalore-based Centre for Science, Technology and Policy which specialises in research in new energy options and energy economics—it has a diverse source of funding which includes a few corporates as well as the government. Bharadwaj is also extremely well-qualified—he holds a mechanical engineering degree from IIT Kanpur, a management degree from IIM Calcutta and a PhD in energy engineering and economics from Carnegie Mellon University in the US, the latter acquired during a sabbatical from government.

Over the last 15 years, many Indian Revenue Service officers too have been wooed by the private sector. Leading the pack is Sandeep Tandon, a 1975 IRS officer who was the departmental representative in the Central Income Tax Tribunal in Delhi. He decided to leave after just 18 years of service, and is currently group advisor to Reliance Industries (Mukesh Ambani group). This is, however, not his full-time job. He also has his private practice as an advocate.

An early pioneer was Vikram Mehta, currently chairman, Shell India Private Limited, India, who left in the glory years of the IAS. Mehta, a 1978-batch Rajasthan-cadre officer—and son of former foreign secretary Jagat Mehta—quit in '80 to work for Phillips Petroleum Co abroad. He had been with the ministry of petroleum, Government of India. He was also one of those with specialised qualifications—after graduating from St Stephen's College in 1972, he went on to do an MA in economics from Oxford followed by an MA in energy economics at the Fletcher School in the US.

urrently, the push to leave the IAS often often comes from a personal factor: supercession, a sense of being boxed in, a bad posting, a brush with Vigilance, the educational needs of children. But the pull factor is not just money—though that is a huge temptation. It is also the challenge of building on skills already acquired. "As long as the licence raj flourished, the private sector existed at the pleasure of the government," says Talwar. "Now the private sector offers an equally large canvas. In government today, the increasing vertical and horizontal divisions means you are being placed in a smaller and smaller box. All the same, there are curbs that don't exist in the private sector."

The sense of not being used adequately is a strong push factor: "I had specialised in ports and shipping—not only did I have experience in government, I also have degrees in the subject. And, I'm a member of professional organisations," says Sinha, speaking of his own case. "But despite my best efforts, I felt I was not being utilised properly." Dhumal is more circumspect: "I find the atmosphere in the private sector far more cordial, congenial and informal and, what's more, conducive to better performance."

So, are the numbers of those leaving causing concern to the government? "No," says Mishra, "it is not an exodus yet. The largest single block leaving would be from Maharashtra, because Mumbai provides the greatest opportunities for commercial employment in the biggest companies. Earlier, even retired officers had hardly any avenues apart from non-official directorships of public sector companies."

According to the ministry's own statistics, the spurt in departures began from 2002—in that year, 21 IAS officers quit; in 2003, the number went up to 26; in the first two years of UPA rule, the figures came down—in 2004, it was 14, in 2005, it was 12. But the figures have again gone up—in 2006, it was 21, in 2007, 19 and in 2008, it is already three.

And it isn't just IAS officers who are in demand. Recently, as many as 150 officers left NICNET taking their "valuable expertise and invaluable experience" to the IT sector, including companies such as Infosys. IRS officers, too, are in great demand because they can help "to maximise profits through legitimate means."

Indeed, one of the great successes of the IRS is Sandeep Tandon. "I didn't feel challenged enough in government," says Tandon, echoing Sinha, "you're so bound by rule books. If you want to get out and have the capabilities to do so, you should. There is also so much waste in government—now I do 10 times as much work as I did in government." He also makes a complaint made by many serving officers: "No one wants to take a decision in government—for fear of making a genuine mistake and then facing a CBI probe. "

Indian Railway Service officers too are finding opportunities in the corporate sector, now that private players have entered the container business and people like the builders of Pipaba Port in Gujarat (the first private port in the country) have been permitted to lay 200 km of rail line to connect it to the nearest rail head. "We have no problems with this," says Mishra, "as this is a facility created by private sector in public interest."

Indeed, the government is increasingly taking a sympathetic view of those leaving for the corporate sector. Earlier, officers had to wait for two years after quitting to take up commercial employment without permission—that has been reduced to one year. Of course, those who opt for the resignation rather than the voluntary retirement route—which means they forego their pension and other benefits—don't have to wait at all.

But even though the numbers of those leaving the IAS has not reached a stage that is causing the government concern, it is equally true that these numbers are only set to increase, unless the government reinvents itself for the 21st century. Till then it will be, as former cabinet secretary T.S.R. Subramanian once remarked after being approached by headhunting firms to suggest names for posts in the private sector, "a coming together of demand, supply and frustration."