Keeping an arm’s length

There is often a sense of discomfort when bureaucrats or top officials from government institutions are taken on board a private organisation after the “cooling period” wears off.

The discomfort is born of an ethical dilemma that raises questions on whether a person dealing with government policy can be seen crossing the divide and joining an industry that he or she may have dealt with in an official capacity.

Just this year there have been high profile appointments in industry, including former SEBI chief UK Sinha as independent director, Vedanta; former Finance Secretary Ashok Chawla as independent director, Jet Airways; former Civil Aviation Secretary Nasim Zaidi, also to Jet Airways as non-executive director; and most recent appointment of former SBI chief Arundhati Bhattacharya to the board of Reliance Industries as an independent additional director. A recent article in The Print says that over 450 former civil servants are on the boards of corporate India. The appointments are legal and above board, as they are made after the mandatory “cooling off” period between their old and new assignments. And there are those who feel nothing is amiss in industry tapping into the expertise of retired officials.

But there is also the need for greater transparency to ensure distance between policies or decisions taken by the government official and the private firm the official joins at a later date. The reverse is also applicable, when industry barons take up political posts and participate in policy making.

For public interest reasons, there needs to be a well defined “conflict of interest” regulatory framework that lays out the checks and balances, guidelines and disclosures. A framework that ensures an arm’s length distance to prevent proximity, influence and corruption, especially in critical sectors like finance, infrastructure and healthcare, is the need of the hour.

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