A K Bhattacharya: Not so cool

RAISINA HILL

Waiving the cooling off period for one bureaucrat raises important questions of propriety.

The Union government's recent permission to former finance secretary Ashok Jha to take up a private sector job has kicked off a debate over the relevance of rules that usually bar civil servants from seeking commercial employment within two years of their retirement. Should the two-year cooling off period be mandatorily enforced? Should exemptions to this rule be granted at all? Or should the two-year restriction be completely scrapped?

Ashok Jha retired as finance secretary early this year. There were reports even before he retired from government service that he had been short-listed by Hyundai Motor to head its India operations as its president. It seems that the government dragged its feet over the proposal for at least a few months. And by the time it gave the clearance, Jha had retired from government service.

Of course, the government could have easily turned down Jha's request to allow him to work for Hyundai even after retirement. There have been a few precedents. The most famous of these cases pertains to B G Deshmukh, who became the cabinet secretary during Rajiv Gandhi's government in the 1980s and later served three Prime Ministers as principal secretary in the PMO. He had sought permission from Chandra Shekhar (who was then the Prime Minister) to take up a job with the Tatas after he quit government service in 1989. That request was turned down.

That the government agreed to Jha's request is likely to send out a new message to senior bureaucrats about its flexibility on the question of exempting them from the two-year cooling off period. More requests for such waiver are likely to be made, citing Ashok Jha's case as a precedent. It is time, therefore, for the government to reassess the validity of these rules. Either the grounds for according exemptions to the rule should be made transparent so that discretion has no place in granting such permissions, or the two-year bar should be strictly followed on all occasions.

Alternatively, the rule itself should be scrapped. The exercise of such an option, however, would raise several other issues. The rules pertaining to private sector employment for senior functionaries in regulatory bodies are even stricter than those usually enforced for government employees.

Take, for instance, the rules stipulated for the chairman and members of the Central Electricity Regulatory Commission (CERC), which is the apex body for regulating the power sector. On ceasing to hold office, the chairperson or any member of the CERC is not eligible for further employment under the central government or any state government for a period of two years. Nor can they accept any commercial employment for a period of two years or represent any person before the CERC or a state-level electricity regulatory commission in any manner.

What constitutes commercial employment? The CERC rules are quite transparent and strict. Commercial employment means "employment in any capacity under, or agency of, a person engaged in trading; commercial, industrial or financial business in the electricity industry and includes a director of a company or partner of a firm and it also includes setting up practice either independently or as partner of a firm or as an adviser or a consultant." This effectively rules out any job for a CERC member or a chairman after he completes his tenure, at least for two years. He cannot be re-employed in any government or public sector organisation for two years. And he has to wait for two years before taking up any private sector assignment.

The re-employment rules for the Telecom Regulatory Authority of India (TRAI) are a little less stringent. On ceasing to hold his office, the chairperson or any other member of the TRAI is eligible for employment under the central government or any state government. But he cannot accept any commercial employment for a period of two years from the date he ceases to hold such office. Commercial employment is defined by the TRAI as comprehensively as the CERC rules have done.

The point is that there is no provision in the rules for exempting chairmen and members of these regulatory bodies from the two-year cooling off period that they must observe before seeking a private sector job. If that is considered necessary for senior functionaries of regulatory bodies, should an exception be made in the case of a cabinet secretary, a finance secretary or a commerce secretary? In what way are these jobs in the ministries less critical than those in the regulatory bodies? Conflict of interest as an argument for retaining the cooling-off period is valid for both the regulatory and secretarial jobs. Discretionary exemptions for some run the risk of undermining governance.