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Who will succeed the LIC chairman?

This is supposed to be the era of the 'New Economy', isn't it? One where the economic strength of a country is supposed to be as important as its military preparedness? Is all that really true? India's claims to greatness in the Internet age burst in the wake of the telecom strike. It is easy to blame the trade unions of course, but I am not sure the heaven-born in the civil service are any better.

Five weeks ago I wrote of the unholy mess that the bureaucracy had created by not following a proper succession policy in important financial institutions. So what has happened between then and now? The chairman of the Life Insurance Corporation retires on June 30. Nobody knows who shall succeed him; the committee of secretaries who shall decide will meet only 72 hours before he steps down!

There is no guarantee their nominee can be placed in office within the limited time that is available. Permission must be taken from several ministers before the man is approved. The Finance Minister, the Home Minister, the Minister of State for Finance (who has been allotted charge of banking and insurance) and so on are required to give the green signal.

I am sure all the persons concerned -- bureaucrats and ministers alike -- are sincere, dedicated men. The fault lies with the entire system, allowing routine matters to assume crisis situations. For instance, everybody knew two years ago that the current chairman of the Life Insurance Corporation was due to retire on June 30, 2000. But sheer inertia prevailed until a mere two days were left to make a decision. Unfortunately, several other financial institutions are facing problems because of this 'leave-it-until-tomorrow' attitude.

Indian Bank has had neither a chairman nor an executive director since May. UCO Bank has not had a head since the previous chairman retired in December 1999. The Punjab and Sind Bank has not had a chairman after April 2000.

It is not as if there has been absolutely no movement to selecting the heads of all these organisations. The laborious work of selecting executive directors for as many as seven banks has begun. The problem is that the government of India is proceeding at a pace that would shame the average snail.

There are only two cases where the government of India has a genuine explanation for the vacancies. The chairman of the Bank of Maharashtra died in office. Another case has landed up in the courts. But that is no excuse for all the other instances -- four chairmen and seven executive directors.

The lion's share of the blame must lie with the upper echelons of the government of India, specifically the civil servants. In every, repeat every, case where the bureaucracy was put in charge of the selection process, there has been an unconscionable delay. That is true of the Life Insurance Corporation and it is true of the nationalised banks, whether in selecting candidates or in processing selections.

The Appointments Committee of the Union Cabinet had foreseen this gridlock several years ago and had come up with a simple solution to managing the last-minute traffic. It recommended that the file(s) on any such appointment should be presented to the Appointments Committee of the Cabinet several months before the incumbent retires. Had this eminently sensible policy been followed by everyone, the government of India would have been spared some totally unnecessary embarrassment today.

We are often told that the security of a country depends upon the efficient management of its economic resources as much as it does upon its military assets. That being the case, may I suggest that the civilians in the government of India take a look at the policy of the Ministry of Defence as regards succession?

There is a very simple dictum in the Ministry of Defence: The successor to a Chief of Staff (Army, Navy, or Air Force) must be announced by the government of India at least 60 days before R-Day -- this being the day when the incumbent retires. This sensible policy has been followed with absolute regularity.

Let me point out another fact: The Ministry of Defence spends something between Rs 500-600 billion every year. The Life Insurance Corporation is in charge of Rs 1,580 billion -- about thrice as much. To put it another way, this sum is roughly what the government of India collects by way of tax every year. Is it asking too much for the powers-that-be to show some sense of responsibility?

T V R Shenoy

Money