Lateral Entry in Civil Services

Lateral Entry in Civil Services

This topic remains in news . Eg : In 2019 , UPSC has selected 9 professionals to work in the capacity of joint secretaries in the Government of India.  

Lateral Entry means people from outside the organization are also considered for recruitment at middle & higher level.

Why Lateral Entry?

  • Specialized knowledge , new Ideas, fresh energy, good practices and Innovative work culture comes in from diverse fields to insular bureaucracy
  • Induce competitiveness – Now Civil Servants have to compete with others too to reach at the top.  Lethargic attitude will diminish. So the prospects of lateral entry will always propel overall efficiency.
  • International Examples : Australia, Belgium, New Zealand,  UK,  Netherlands and  US follow this system successfully.
  • There have been government commissions and reports advocating the lateral entry of specialists.  6th Pay Commission, 7th Pay Commission, Niti Ayog  and Second ARC & Hota Committee (2004)  were unanimous on lateral entry.
  • Deficit of Middle Level OfficersBaswan Committee (2016)  noticed overall 20% shortfall of IAS cadre officers and states are unwilling to send their officers on deputation to Central Government.  Lateral Entry can help in addressing this issue
  • Competitive federalism requires state and union to hire persons with specialized skills and knowledge for informed policy making
  • IAS officers get recruited at very young age when it is difficult to test potential administrative and judgement capabilities making it prone to both type I and type II errors ie some who are potentially good administrators fail to make it, and some who do make it, fall short of the requirements. Mid-career lateral entrants with proven capabilities will help bridge this deficiency.

With governance becoming increasingly complex, experts need to be at the forefront . Present Bureaucracy is seen as a monolith with no scope for improvement, self-serving & obstructionist license-quota Raj vestige. It is an argument well-known to students of public administration that Weberian bureaucracy is status-quoist, and is not fit to administer a chaotic, rapidly growing country . Hence, Lateral Entry can provide new lease of life to bureaucracy.

Current State Of Lateral Entry?

  • It  has been done but at a limited scale and at very high level.
  • Few examples are RBI  Governor & NITI Aayog Vice president
  • The idea of inducting exceptional talent from outside is not entirely new. K.R. Narayanan, India’s 10th President, joined the Indian Foreign Service at the behest of the then Prime Minister Jawaharlal Nehru, apparently without appearing for the qualifying examinations. He was strongly recommended by the renowned political theorist Harold J. Laski. Some recent examples include the appointment of Nandan Nilekani (Chairman of UIDAI), Montek Ahluwalia (Planning Commission) , Raghuram Rajan (Governor of the Reserve Bank of India) and various other experts in the Niti Aayog and other government bodies. 

Challenges For Lateral Entry?

  • Dangers for creation of Spoil System (Politically motivated selection)
  • Opposition from Civil Servants whose chances of promotion are reduced.
  • Short term lateral entrants can misuse their office when they occupy that post and later can misuse the insider information putting national security at risk.
  • Best talent can be attracted in civil services only if there is reasonable assurance of reaching top level managerial positions
  • Width and depth of field experience which the civil services provide is simply not available with outside talent
  • Civil services administrative framework has integrated the diverse country into a coherent whole. Therefore, we should not tamper with the framework
  • Lateral entry does open the risk and prospect of powerful corporate groups placing their men in key positions of government.
  • Issue of reservation : There are no provisions regarding Reservation in 10 Joint Secy Level posts (2018)

How it should be handled?

  • Transparency and accountability are two important factors that should not be underplayed in hiring lateral entrants. Discretion on lateral entry may pave the way to charges of being “politically motivated”, which may degrade the system.
  • A credible agency like the UPSC should be entrusted with the responsibility of recruitment. This would help avoid many pitfalls associated with general lateral entry.
  • For this, the ARC recommended the establishment of a Central Civil Services Board to deal with issues concerning lateral entries. But the body, which would have ensured a robust and accountable system of lateral entry, is yet to come into existence.

Regulatory Bodies

Regulatory Bodies

This article deals with ‘Regulatory Bodies.’ This is part of our series on ‘Governance’ which is important pillar of GS-2 syllabus . For more articles , you can click here


  • Regulatory body is an organization set up by the Government to monitor, guide and control a particular sector such as banking, insurance, education or healthcare.
  • It is in contrast to laissez faire which demand complete unregulation/free economy. But since we know the perils of completely free market economy, regulation upto certain extend is very much desirable.
  • After Liberalisation and Privatisation, role of the state changed to rule-maker and regulator. With this, we saw emergence of special category of regulatory systems Independent Statutory Regulating Agencies.

Crux of the matter : When government goes out of particular sector => Make Independent Statutory Regulator for that sector

Need of Regulation

Regulation is needed due to following reasons :-

In case of Natural Monopoly Natural monopoly = when an entire market is more efficiently served by one firm than by two or more firms .
– In such cases, regulation may be necessary to protect consumer interests. 
In India, the transmission and distribution of electricity is still natural monopolies. 
To remove Asymmetric Information When one party to a transaction knows more about the product than another.
Eg: health  sector.  
Presence of Externalities Eg : an industrial plant discharging waste into a river . 

Check Anti Competitive practices    – Firms may resort to anti competitive practices
– Regulatory bodies check this
Promote Public Interest Regulation promotes the public interest.

Categories of Regulation in India

Regulation in India can be mapped under three broad categories: economic regulation, regulation in the public interest and environmental regulation. 

Economic Regulation Aims at preventing market failure.
By punishing market distorting behavior.
– Eg :  Electricity Act of 2003, which allows State regulators to fix tariffs for power consumption
Regulation in Public Interest Eg : Bureau of Indian Standards (BIS) => setting quality and safety standards for various products 
Environmental Regulation Protect the environment from harm.   

Reasons for Proliferation of Regulatory Bodies post 1991

  • Market economy demands the competition. Regulatory Bodies were made to ensure level playing field 
  • To attract Foreign Investment : Regulatory Bodies were made to ensure Foreign Investors that decisions will not be guided by Populistic considerations .
  • After LPG, Capacity of states to answer various business problems was limited . Bureaucracy failed to answer many questions related to emerging sectors. Hence, government decided to rope in Technocrats via Technocratic Regulators 

Important Regulatory Bodies (Prelims Point of view)

IRDA Regulator of Insurance Sector  
SEBI SEBI = Securities and Exchange Board of India
– Regulator of Equity Market
CCI CCI = Competition Commission of India
To check monopolistic tendencies in the market
TRAI TRAI = Telecom Regulatory Authority of India
Regulator of  telecom sector
CERC – CERC = Central Electricity Regulatory Commission
– Constituted under electricity act of 2003 Statutory body
FMC – FMC = Forward Market Commission
– It was  Regulator of Commodity Market Dissolved in budget(2015) .  Now Commodity market to be regulated by SEBI  
AERB Atomic Energy Regulatory Board  
FSSAI Food Safety and Standards Authority of India (FSSAI) 
Established under Food Safety and Standards Act, 2006 
Created for laying down science based standards for articles of food   

Issues related to Regulatory bodies in India

Based on Damodran Committee (formed in 2012 when World Bank ranked India 132 on Ease of Doing Business) and 2nd Administrative Reforms Commission.

1 . Independence

  • Functional independence is  curbed by dependence of regulators on concerned line ministries for
    • budgetary allocations
    • sanctioning of staff appointments 

2. Over-regulation

  • India  is  an  over regulated  country,  but  many  of  the  regulations  are  not  implemented  in  right earnest of complex procedure & outdated regulations

3. Regulatory Gaps

  • Justice BN Srikrishna Committee on Financial Sector Legislative Reforms Commission noted this . Eg : Ponzi Schemes don’t come under any regulation inspite of many regulators in Financial Sector like SEBI, IRDA etc.

4. Accountability

  • US = Regulators are accountable to Congress (legislature)
  • India = Regulators are accountable to Ministries

Parliamentary supervision is ideal form of political accountability because vested interest groups  find it easier to  pressurise the regulator through  ministry 

5. Regulator vs Executive

  • Executive tries to encroach space given to regulators to enforce populistic agendas 
  • Eg : Electricity Sector – State Governments tries to keep charges low in order to keep consumers and farmers lobby happy

6. Overlapping functions

  • Regulatory overlap between different Regulators. Eg : SEBI and Competition Commission of India etc.

7. Lack of Transparency

  •  Regulatory bodies suffer from lack of  transparency.

Future  Course  of  Action

  1. Regulate where it is necessary. Don’t over-regulate the sector because it chokes development (2nd ARC Recommendation)
  2. 2nd ARC has given 5 Principles on which Regulatory Mechanism should be based upon
    • Simplicity
    • Objectivity
    • Transparency
    • Convergence
    • Speedy Disposals
  3. Regulatory Impact Assessment (RIA) of every proposed regulation  
  4. Ensure  independence  of  regulatory  bodies
  5. Self Regulation is the best form of regulation. Eg : Broadcasting Standards Authority of India
  6. Still large number of sectors are under the regulation of State Departments . Eg : Director General of Civil Aviation under Civil Aviation Ministry etc. Government should move towards Independent Statutory Regulators for all non-strategic sectors.
  7. There should be constant interaction between Regulators and Policy makers and Regulators and other stakeholders so that regulator must be aware of the concerns of stakeholders and also regulator  can explain  the  rationale  of  various  regulatory  decisions.
  8. Reducing  the  overlap  of  jurisdiction  between  the  CCI (Competition Commission)  and  regulators
  9. Introducing  multi-sector  regulators:  To eliminate  proliferation  of  regulatory  commissions , government  is  contemplating  the establishment  of  multi-sector  regulators  for 
    • communications ; 
    • transport;  and 
    • electricity,  fuels  and  gas. 
  10. Constituting  appellate  tribunals  on  the  lines  of  telecom  and  electricity  appellate tribunals

Example : Good Regulator vs Bad Regulators

For regulator to work independently, it must be independent from Executive, Pressure Groups, Industrial Lobbies etc which can pressurise them to get favourable outcomes .

1 . Example of Bad Regulators

  • Forward Market Commission (FMC) : Was regulating Commodity Markets but wasn’t able to stop NSEL Scam .
  • MCI (Medical Council of India) : It’s Chairman Ketan Desai  took bribes to grant clearance to  medical colleges 
  • CERC (Central Electricity Regulatory Commission ) : Explained below.
  • Nuclear Safety Regulatory Authority (NSRA)  : It falls under Department of Atomic Energy (Promoter of any sector cant be its Regulator) Done in Nuclear Energy.
  • FSSAI : Maggi issue

2. Examples of Good Regulators

  • TRAI : Protected Mobile Customers against Mobile Companies
  • CCI : Broke Cartelisation of Cement Companies
  • SEBI : Managed Security Market well (in stark contrast to FMC)

In question such as Independence of Regulators is necessary to regulate sector effectively=> Give example of both good and bad regulators. Don’t just stick to bad ones.

Side Topic : SEBI and how it presents an example of good regulator?

  • Securities and Exchange Board of India (SEBI) works independent in 
    • hiring of professionals
    • Deciding salaries
    • generate finances to run via fee
    • crack down on companies without government pressure.

Side Topic : How CERC lead to downfall of whole electricity sector?

  • CERC = Central Electricity Regulatory Commission
  • CERC has a strength of 55, against sanctioned strength of 80. 
  • CERC has no independent fund and comes under public accounts.
  • There is  ceiling on the salaries of permanent staff

Due to this , although CERC is supposed to pass orders in 90 days of hearing but there are cases awaiting decision for years now. This leads to projects getting stalled, companies coming under financial stress and the subsequent increase in the cost of power.

Hence, inefficient working of regulator has stalled the development of sector .