'The country suffers, the system suffers...': Arvind Panagariya opens up on lateral entry rollback at BT India@100

Arvind Panagariya, Chairman of the Finance Commission, expressed disappointment over the government's decision to roll back the advertisement for lateral entry into the bureaucracy, a move that has sparked significant political controversy. 

At a BT India@ 100 session, Panagariya stressed on the need for governance reforms, pointing out that lateral entry, although limited, was a step towards bringing in much-needed talent into the government. 

"This was the second such effort. It's a drop in the bucket, not a large number," Panagariya remarked, underscoring the limited scale of the initiative.

Panagariya acknowledged that the decision to cancel the advertisement might have been driven by the criticism it received. "Maybe we need to find alternative ways," he noted. He stressed the importance of integrating specialists into the government, arguing that while generalists in the bureaucracy can acquire specialist skills, bringing in external talent with specific expertise is equally crucial.

The rollback means that the government might have to rely more heavily on consultants, a practice Panagariya views as less effective. 

"This was a more genuine lateral entry because it puts the lateral entrants in positions of power," he explained. The alternative, he said, would involve using consultants who provide specialized services without decision-making authority. 

"The country suffers, the system suffers," Panagariya lamented, highlighting the missed opportunity for real reform.

Reflecting on the broader political environment, Panagariya expressed concern about the contentious nature of modern politics, contrasting it with the past. "In 1954, IG Patel's entry into the government as an economist was non-controversial, and it happened under a Congress government," he recalled. He also noted that the Congress party of today is different from that era, pointing out that Mrs. Gandhi actively fought against the caste system in her speeches. "We need to move away from caste-based politics," he urged.

The government's decision to cancel the lateral entry advertisement comes after significant backlash from opposition parties. Union Minister Jitender Singh conveyed the Prime Minister's belief that the process should be "aligned with social justice," a sentiment echoed by BJP ally Chirag Paswan, who welcomed the decision. The advertisement, issued by the UPSC last week, sought "talented and motivated Indian nationals" for senior positions in 24 ministries, covering roles such as Joint Secretary, Director, and Deputy Secretary.

In his letter, the Union Minister highlighted the Modi government's efforts to make the lateral entry process transparent, institutionally driven, and open, a departure from the ad-hoc and allegedly favoritism-driven practices before 2014. However, the need to align with the principles of equity and social justice, particularly regarding reservation provisions, ultimately led to the advertisement's cancellation.