PS21

Public Service for the 21st Century (Singapore)

PSC

Public Service Commission

PSD

Public Services Division (Singapore)

PSUs

Public Sector Undertakings

RBSS

Railway Board Secretariat Service

RTI

Right to Information

SAG`

Senior Administrative Grade

SC/STs

Scheduled Castes/Scheduled Tribes

SCOS

Special Committee of Secretaries

SCS

Singapore Civil Service

SES

Senior Executive Service

SHO

Station House Ocer

SPARC

Second Provisional Administrative Reforms Commission (Japan)

SPIPA

Sardar Patel Institute of Public Administration

SQIU

Improvement Unit (Singapore)

SVPNPA

Sardar Vallabhbhai Patel National Police Academy

TERI

The Energy and Research Institute

UDCs

Upper Division Clerks

UK

United Kingdom

UPSC

Union Public Service Commission

USA

United States of America

UTs

Union Territories

YASHADA

Yashwantrao Chavan Academy of Development Administration

INTRODUCTION

1.1 The Second Administrative Reforms Commission was set up with a wide mandate to
prepare a blue print for revamping the public administration system and to suggest measures
to achieve a pro-active, responsive, accountable, sustainable and ecient administration
for the country at all levels of government.
1.2 There is a growing realization that many agencies of government are functioning suboptimally, and government programmes have not always yielded the desired results. While
the achievements of the public services are praiseworthy in dealing with the vast expanded
responsibilities since Independence and especially during dicult periods of crisis, they
are often decient in crucial areas such as productivity, responsiveness, accountability and
integrity. Authority frequently appears to be divorced from accountability, leading to a system
of realistic and plausible alibis for non-performance. Ineciency, corruption and delays
have become, in public perception, the hallmarks of public administration in India.
1.3 Administration should be reformed to bring about improved transparency, greater
accountability and streamlining of the structure of government, based on decentralization,
civil services reform, an open and responsive government, rule of law, scal and environmental
sustainability and elimination of all forms of corruption. There is need to restructure our
governance institutions and rejuvenate our administrative system so that it can respond
to the growing challenges of governance. The State needs to reorient its focus on the core
functions of government such as maintaining peace and stability in the country and the
task of social investment and provision of public goods through investment in the social
sectors like health and education, as these are critical to lifting people out of abject need,
preventing inter-generational transmission of poverty, long term development of human
capital, achievement of full human potential and promotion of rapid, sustainable and
equitable economic growth.
1.4 Public servants today are at the helm of complex challenges of administration in critical
sectors like policing, education, healthcare, transportation, land management, infrastructure,
skill promotion, employment generation, rural development and urban management. All
these are intricate issues, which call for domain expertise, long experience in the sector, and

xxii

Refurbishing of Personnel Administation Scaling New Heights

deep insights into the social and economic realities, besides qualities of leadership and the
capacity to manage and respond to change. Processes of civil service recruitment, periodic
training, promotion and posting strategies and career management have to be reformed
urgently to help the public servants develop such skills. There is need to foster excellence
in the public systems, and attract continuously the best talent and expertise while ensuring
that they are citizen-centric.
1.5 Administration must become far more accountable and eective in delivering results
with the same expenditure. In order to accomplish these goals, there should be conscious
eorts to establish the links and fuse authority with accountability. While compliance with
processes is important to ensure objectivity and fairness, the processes themselves need to
be simplied and changed from time to time. Priority needs to be given to ensuring that
the intended outcomes benet society. There is need to redesign our delivery mechanisms
in an innovative manner based on past experience and best practices and deploy the nations
nest talent for this purpose.
1.6 Although several Commissions and Committees have been set up in the past to examine
various aspects of public administration, a comprehensive review of the entire public
administration system was last done by the First Administrative Reforms Commission,
which was set-up in 1966. Since then, several important changes and developments have
taken place driven by the pressing need to reform, rapid changes in technology including
information technology and signicant institutional changes like the emergence of a
constitutionally-mandated system of local government in our country. This has obviously
necessitated the need for a comprehensive review of public administration as mandated
for this Commission.
1.7 In any system the quality of public servants is the key determinant of outcomes.
It is in this context that this Report of the Commission, on Refurbishing of Personnel
Administration, is critical to its wider mandate. Specically under this Term of Reference,
the Commission is required to look into the following aspects of administration:-

Introduction

(iv)

Strategies for upgradation of skills and competencies of civil servants and

administrative cadres and appropriate interventions for capacity building.

(v)

Linking of performance of Civil Servants and Government personnel to social

and economic objectives and outcomes.

1.8 To get a deeper understanding and feedback on the issues pertaining to the civil services,
the ARC formulated two comprehensive questionnaires [Annexures I(1) and I(2)]. The
questionnaires also highlighted the Commissions approach to the key principles of civil
services reform which need to be particularly emphasized. These are mentioned below:
Setting right the asymmetry of power: It was noted that there is an imbalance in the
exercise of power in governance. Often systemic rigidities, needless complexities
and over-centralization make public servants ineective and helpless in achieving
positive outcomes. On the other hand, negative power of abuse of authority
through agrant violation of law, petty tyranny and nuisance value is virtually
unchecked. This situation is further aggravated by the asymmetry of power in our
society. The privileged government position gives even the lower government
functionaries, enormous power over most of the citizens given the abject poverty,
illiteracy and a lingering feudal culture. This needs to be set right in any eort
towards public services reforms.
Insulating civil servants from undue political interference: In a democracy, the civil
service has to be answerable to the elected government. There is criticism, however,
that increasingly partisan intervention and cronyism are undermining the Rule of
Law, distorting incentives and condoning corruption. This is adversely aecting
the morale of public servants. The relationship between the political executive and
the civil services needs to be transformed on the basis of mutual understanding,
respect and recognition of each others distinct roles and responsibilities.

(i)

Review the policy relating to and all methods of recruitment, training and
placement and suggest changes, if required.

(ii)

Provide guidelines for enhancing performance of civil servants and its

appraisal.

Professionalisation with stability of tenure and competition: There is need to recognize

the complex challenges of modern administration in various spheres of activities.
Meeting such challenges require domain expertise and long experience in the
sectors concerned. There is also need to foster excellence in the public system.
Existing procedures and practices do not adequately help in developing domain
expertise, nor do they help in utilizing the available domain expertise.

(iii) Improved methods of cadre management focusing on career progression,

motivation and productivity enhancement.

Citizen-centric administration: The fact that the functioning of the civil services has
an impact on the quality of governance and thus on the well being of the citizen
3

Refurbishing of Personnel Administation Scaling New Heights

deep insights into the social and economic realities, besides qualities of leadership and the
capacity to manage and respond to change. Processes of civil service recruitment, periodic
training, promotion and posting strategies and career management have to be reformed
urgently to help the public servants develop such skills. There is need to foster excellence
in the public systems, and attract continuously the best talent and expertise while ensuring
that they are citizen-centric.
1.5 Administration must become far more accountable and eective in delivering results
with the same expenditure. In order to accomplish these goals, there should be conscious
eorts to establish the links and fuse authority with accountability. While compliance with
processes is important to ensure objectivity and fairness, the processes themselves need to
be simplied and changed from time to time. Priority needs to be given to ensuring that
the intended outcomes benet society. There is need to redesign our delivery mechanisms
in an innovative manner based on past experience and best practices and deploy the nations
nest talent for this purpose.
1.6 Although several Commissions and Committees have been set up in the past to examine
various aspects of public administration, a comprehensive review of the entire public
administration system was last done by the First Administrative Reforms Commission,
which was set-up in 1966. Since then, several important changes and developments have
taken place driven by the pressing need to reform, rapid changes in technology including
information technology and signicant institutional changes like the emergence of a
constitutionally-mandated system of local government in our country. This has obviously
necessitated the need for a comprehensive review of public administration as mandated
for this Commission.
1.7 In any system the quality of public servants is the key determinant of outcomes.
It is in this context that this Report of the Commission, on Refurbishing of Personnel
Administration, is critical to its wider mandate. Specically under this Term of Reference,
the Commission is required to look into the following aspects of administration:-

Introduction

(iv)

Strategies for upgradation of skills and competencies of civil servants and

administrative cadres and appropriate interventions for capacity building.

(v)

Linking of performance of Civil Servants and Government personnel to social

and economic objectives and outcomes.

1.8 To get a deeper understanding and feedback on the issues pertaining to the civil services,
the ARC formulated two comprehensive questionnaires [Annexures I(1) and I(2)]. The
questionnaires also highlighted the Commissions approach to the key principles of civil
services reform which need to be particularly emphasized. These are mentioned below:
Setting right the asymmetry of power: It was noted that there is an imbalance in the
exercise of power in governance. Often systemic rigidities, needless complexities
and over-centralization make public servants ineective and helpless in achieving
positive outcomes. On the other hand, negative power of abuse of authority
through agrant violation of law, petty tyranny and nuisance value is virtually
unchecked. This situation is further aggravated by the asymmetry of power in our
society. The privileged government position gives even the lower government
functionaries, enormous power over most of the citizens given the abject poverty,
illiteracy and a lingering feudal culture. This needs to be set right in any eort
towards public services reforms.
Insulating civil servants from undue political interference: In a democracy, the civil
service has to be answerable to the elected government. There is criticism, however,
that increasingly partisan intervention and cronyism are undermining the Rule of
Law, distorting incentives and condoning corruption. This is adversely aecting
the morale of public servants. The relationship between the political executive and
the civil services needs to be transformed on the basis of mutual understanding,
respect and recognition of each others distinct roles and responsibilities.

(i)

Review the policy relating to and all methods of recruitment, training and
placement and suggest changes, if required.

(ii)

Provide guidelines for enhancing performance of civil servants and its

appraisal.

Professionalisation with stability of tenure and competition: There is need to recognize

the complex challenges of modern administration in various spheres of activities.
Meeting such challenges require domain expertise and long experience in the
sectors concerned. There is also need to foster excellence in the public system.
Existing procedures and practices do not adequately help in developing domain
expertise, nor do they help in utilizing the available domain expertise.

(iii) Improved methods of cadre management focusing on career progression,

motivation and productivity enhancement.

Citizen-centric administration: The fact that the functioning of the civil services has
an impact on the quality of governance and thus on the well being of the citizen
3

Refurbishing of Personnel Administation Scaling New Heights

and the welfare of the community as a whole is often forgotten. The perception of
the civil services today is of a vast impersonal organization without commitment
to human needs and values. It is necessary to redress the situation particularly
in this era of participative democracy by making the governance apparatus an
instrument of service to the people.
Accountability: There is a general feeling that existing mechanisms of accountability
are inadequate. On the one hand, there are alibis for non-performance and on
the other, competence and integrity are not adequately recognized or rewarded.
Therefore, innovative and eective mechanisms need to be put in place to protect
public money, guarantee intended outcomes and enforce accountability.
Outcome orientation: Monitoring in government is primarily through measurement
of expenditure against outlays and at best through dened outputs. Clearly, there
is need to move towards measurement of outcomes. A change in this direction has
already started with the initial outcome budgeting exercises. In order to engineer
this shift to outcomes, major changes in attitudes, monitoring and evaluation
systems, incentives and accountability measures are necessary.
Promoting public service values and ethics: Apart from the traditional civil service
values of eciency, integrity, accountability and patriotism, it is necessary for
civil servants to inculcate and adopt ethical and moral values including probity
in public life, respect for human rights and compassion for the downtrodden and
commitment to their welfare.
These core principles and the issues emanating from them have been analyzed in detail in
various chapters of this Report.
1.9 During its visit to the States, the Commission held detailed discussions with the
Governors and Chief Ministers, retired civil servants, eminent public personalities, ocers
of State Governments and members of the public and the media. The Commission also
organized a series of consultations with the Central and All India Services. The Commission
held two workshops organized jointly with the Management Development Institute (MDI),
Gurgaon and the Indian Institute of Public Administration (IIPA), New Delhi respectively.
Discussions were also held with the Secretaries to the Government of India and Heads of
Departments. In addition, the Commission took assistance of several experts to get a deeper
understanding of the dierent aspects of administration. The Commission had discussions
with heads of the Confederation of Indian Industry (CII), Federation of Indian Chambers

Introduction

of Commerce and Industry (FICCI) and several corporate leaders. The Commission also
visited Singapore, Australia, Thailand, France and the United Kingdom and had extensive
discussions with the authorities there in order to understand the process of reform of public
administration in those countries.
1.10 The Commission would like to thank Shri S.K. Das, Consultant of the ARC for
providing very important inputs in drafting this Report. The Commission is grateful to Prof
D.P. Agarwal, Chairman, UPSC, Shri Subir Dutta, Former Chairman, UPSC and Shri K.
Roy Paul, Member, UPSC for sharing their views on civil services reforms. The Commission
acknowledges the valuable suggestions of Dr. N.R. Madhava Menon on the subject of
post-school grooming for civil servants. The Commission would also like to thank Shri
Rajeev Chandrasekhar, Member of Parliament and President FICCI and other members
of FICCI for their valuable suggestions; the Commission would like to thank Shri K.V.
Kamath, Managing Director and Chief Executive Ocer of ICICI Bank Limited and
President CII and Shri K Ram Kumar, Group Chief Human Resources Ocer, ICICI
Bank, for presenting the human resources management practices in the corporate sector.
The Commission is grateful to Shri T.V. Rao for his contribution to the section on the
performance management systems and to Prof. Pradip Khandwalla for preparing a Report on
the Organisational Structure of Government. The Commission acknowledges its gratitude
for the very useful suggestions made by eminent retired civil servants, including former
Cabinet Secretaries, former Secretaries to Government and former Heads of Central Police
Organisations, at a meeting held in Delhi. The Commission expresses its gratitude to the
World Bank, India oce and Shri Vikram Chand, Senior Public Sector Management
Specialist, Dr. Prajapati Trivedi, Senior Economist World Bank and Shri K. Sarwar Lateef,
Governance Specialist, for giving a global perspective on public services reforms and
good governance. The Commission would also like to thank Shri J.C. Pant, Chairman,
Administrative Reforms Commission, Uttarakhand and the Chairman and Members of
the Tamil Nadu State Administrative Reforms Commission and Bihar Administrative
Reforms Committee for sharing their views on various reform measures proposed by
them. The Commission acknowledges the contribution of a large number of ocers and
experts including Shri Naved Masood, Additional Secretary and Financial Adviser, Ministry
of Health and Family Welfare, Shri K.P. Krishnan, Joint Secretary, Ministry of Finance,
Shri O.P. Agarwal, Former Joint Secretary, Department of Personnel and Training, Shri
Rakesh Hooja, Additional Chief Secretary (Training) and Director, HCM, RIPA and Shri
Hasmukh Adhia, Director General, SPIPA. The Commission is grateful to the Chairman
and Members of the Sixth Central Pay Commission, with whom the Commission had
very useful discussions. The Commission is thankful to DFID India oce for a very useful

Refurbishing of Personnel Administation Scaling New Heights

and the welfare of the community as a whole is often forgotten. The perception of
the civil services today is of a vast impersonal organization without commitment
to human needs and values. It is necessary to redress the situation particularly
in this era of participative democracy by making the governance apparatus an
instrument of service to the people.
Accountability: There is a general feeling that existing mechanisms of accountability
are inadequate. On the one hand, there are alibis for non-performance and on
the other, competence and integrity are not adequately recognized or rewarded.
Therefore, innovative and eective mechanisms need to be put in place to protect
public money, guarantee intended outcomes and enforce accountability.
Outcome orientation: Monitoring in government is primarily through measurement
of expenditure against outlays and at best through dened outputs. Clearly, there
is need to move towards measurement of outcomes. A change in this direction has
already started with the initial outcome budgeting exercises. In order to engineer
this shift to outcomes, major changes in attitudes, monitoring and evaluation
systems, incentives and accountability measures are necessary.
Promoting public service values and ethics: Apart from the traditional civil service
values of eciency, integrity, accountability and patriotism, it is necessary for
civil servants to inculcate and adopt ethical and moral values including probity
in public life, respect for human rights and compassion for the downtrodden and
commitment to their welfare.
These core principles and the issues emanating from them have been analyzed in detail in
various chapters of this Report.
1.9 During its visit to the States, the Commission held detailed discussions with the
Governors and Chief Ministers, retired civil servants, eminent public personalities, ocers
of State Governments and members of the public and the media. The Commission also
organized a series of consultations with the Central and All India Services. The Commission
held two workshops organized jointly with the Management Development Institute (MDI),
Gurgaon and the Indian Institute of Public Administration (IIPA), New Delhi respectively.
Discussions were also held with the Secretaries to the Government of India and Heads of
Departments. In addition, the Commission took assistance of several experts to get a deeper
understanding of the dierent aspects of administration. The Commission had discussions
with heads of the Confederation of Indian Industry (CII), Federation of Indian Chambers

Introduction

of Commerce and Industry (FICCI) and several corporate leaders. The Commission also
visited Singapore, Australia, Thailand, France and the United Kingdom and had extensive
discussions with the authorities there in order to understand the process of reform of public
administration in those countries.
1.10 The Commission would like to thank Shri S.K. Das, Consultant of the ARC for
providing very important inputs in drafting this Report. The Commission is grateful to Prof
D.P. Agarwal, Chairman, UPSC, Shri Subir Dutta, Former Chairman, UPSC and Shri K.
Roy Paul, Member, UPSC for sharing their views on civil services reforms. The Commission
acknowledges the valuable suggestions of Dr. N.R. Madhava Menon on the subject of
post-school grooming for civil servants. The Commission would also like to thank Shri
Rajeev Chandrasekhar, Member of Parliament and President FICCI and other members
of FICCI for their valuable suggestions; the Commission would like to thank Shri K.V.
Kamath, Managing Director and Chief Executive Ocer of ICICI Bank Limited and
President CII and Shri K Ram Kumar, Group Chief Human Resources Ocer, ICICI
Bank, for presenting the human resources management practices in the corporate sector.
The Commission is grateful to Shri T.V. Rao for his contribution to the section on the
performance management systems and to Prof. Pradip Khandwalla for preparing a Report on
the Organisational Structure of Government. The Commission acknowledges its gratitude
for the very useful suggestions made by eminent retired civil servants, including former
Cabinet Secretaries, former Secretaries to Government and former Heads of Central Police
Organisations, at a meeting held in Delhi. The Commission expresses its gratitude to the
World Bank, India oce and Shri Vikram Chand, Senior Public Sector Management
Specialist, Dr. Prajapati Trivedi, Senior Economist World Bank and Shri K. Sarwar Lateef,
Governance Specialist, for giving a global perspective on public services reforms and
good governance. The Commission would also like to thank Shri J.C. Pant, Chairman,
Administrative Reforms Commission, Uttarakhand and the Chairman and Members of
the Tamil Nadu State Administrative Reforms Commission and Bihar Administrative
Reforms Committee for sharing their views on various reform measures proposed by
them. The Commission acknowledges the contribution of a large number of ocers and
experts including Shri Naved Masood, Additional Secretary and Financial Adviser, Ministry
of Health and Family Welfare, Shri K.P. Krishnan, Joint Secretary, Ministry of Finance,
Shri O.P. Agarwal, Former Joint Secretary, Department of Personnel and Training, Shri
Rakesh Hooja, Additional Chief Secretary (Training) and Director, HCM, RIPA and Shri
Hasmukh Adhia, Director General, SPIPA. The Commission is grateful to the Chairman
and Members of the Sixth Central Pay Commission, with whom the Commission had
very useful discussions. The Commission is thankful to DFID India oce for a very useful

Refurbishing of Personnel Administation Scaling New Heights

presentation made about reforms in the UK. The Commission is grateful to the ocers of
the Ministry of Defence and the three Services for their comprehensive presentation on
the performance appraisal systems in the Armed Forces. The Commission acknowledges
with thanks several important suggestion on civil services reforms, received from the
representatives of the media. The Commission is particularly grateful to the dignitaries
and ocers of the countries visited, for sharing their experiences of reforms undertaken in
their respective countries.

HISTORY OF CIVIL SERVICES IN INDIA AND

REFORMS

2.1. History
2.1.1 The Macaulay Committee which gave India its rst modern civil service in 1854
recommended that the patronage based system of the East India Company should be
replaced by a permanent civil service based on a merit based system through competitive
entry examinations. As Macaulays Report said, Henceforth, an appointment to the civil
service of the Company will not be a matter of favour but a matter of right. He who obtains
such an appointment will owe it solely to his own abilities and industry.1 The Report made
it clear that only the best and the brightest would do for the Indian Civil Service (ICS).
The Report stated, It is undoubtedly desirable that the civil servants of the Company should
have received the best, the most nished education that the native country aords.2 The Report
insisted that the civil servants of the Company should have taken the rst degree in arts at
Oxford or Cambridge Universities.
2.1.2 After 1855, recruitment to the ICS came to be based totally on merit. The report of
the Civil Service Commissioners pointed out that of those who entered the ICS between
1855 and 1878, more than two-thirds were university men, equipped with a liberal and
nished education.3 Initially, the ICS sought its recruits from Oxford and Cambridge. It was
thus an elite service. Subsequently, it opened its doors to Indians and from 1922 onwards
the Indian Civil Service Examination began to be held in India.
2.2 The Design of the Civil Service at Independence
2.2.1 While designing a successor civil service, the Indian political leaders chose to retain
elements of the British structure of a unied administrative system such as an open-entry
system based on academic achievements, elaborate training arrangements, permanency of
tenure, important posts at Union, State and district levels reserved for the civil service, a
regular graduated scale of pay with pension and other benets and a system of promotions
and transfers based predominantly on seniority.4 The civil services in India can be grouped
into three broad categories. Services whose members serve both the Union and the State
Governments are termed as All India Services. Services whose members serve only the Union
Government are termed Central Civil Services. Apart from these, the State Governments
6

7
1

Macaulay Committee Report on the Civil Service (Fulton Committee Report), Vol.1, HMSO, London (1975)
Macaulay Committee Report
B B Mishra, The Bureaucracy in India, Oxford University Press, 1977
4
R B Jain and O P Dwivedi, Bureaucracy in India: The Developmental Context, in R B Jain (ed.), Bureaucratic Politics in the Third World, Gitanjali Publishing House, 1989
2
3