The recent appointment of Parameswaran Iyer, former NITI Aayog CEO, to the post of World Bank’s executive director was the first such since 2014, in which a retired official was nominated by the government for such a position.
After a six-month stint as Niti CEO, Iyer replaced Rajesh Khullar, who was repatriated six months before his term. Khullar was Joint Secretary, Department of Economic Affairs, before his posting as the ED.
“World Bank and IMF are a path for government-to-government arrangements. India has a certain number of positions. These posts are usually used for rewarding people, preferably serving bureaucrats, but at times even somebody recently retired,” Pronab Sen, economist and former chief advisor to the Planning Commission said.
In 2011, M N Prasad, a 1972 batch Bihar Cadre IAS was the retired official who served as secretary to former Prime Minister Manmohan Singh, held the position of World Bank’s executive director in Washington DC from 2011 to 2014. Prasad was also a student of Singh at the Delhi School of Economics.
Experts pointed out that the appointment of relatively younger officials is a recent phenomenon as previously soon to retire officials were the one who almost always got such posts.
"If you want to benefit from that experience you need that official to come back. A retired officer would not be of any use with all that knowledge," a top government official who retired a few years ago said.
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Foreign postings such as those to the World Bank, Asian Development Bank, International Monetary Fund, policy experts said are almost always used as a reward.
“These are patronage posts and given to officers who the government wants to reward. This is pure favouritism and nothing else,” said former finance minister Yashwant Sinha. The veteran politician, however, said there are rare occasions when the government can use these postings to remove certain officials from their current post.
Top economic officials however have enjoyed these postings for a few decades now. In 1989, finance secretary Gopi Arora made way for Bimal Jalan and took the posting of executive director at the IMF. Former revenue secretary M R Sivaraman, known for transforming customs and excise duty structure in 1994-95, was rewarded with IMF posting by former PM Manmohan Singh in 1996.
“It is a pretty good appointment and usually grabbed by senior guys. The amount of exposure you get by sitting on a board of the World Bank is immense.”the top official said.
In August 2020, Ashok Lavasa, former election commissioner resigned from his post with two years still left in his tenure to join the Asian Development Bank. Lavasa was next in line to become the Chief Election Commissioner and the only one who did not agree with Election Commission’s decision to give clean chit to Prime Minister Narendra Modi and Home Minister Amit Shah for alleged poll code violations.
Aparna Subramani, who was appointed as executive director of World Bank in 2017, returned to join the government as pharma secretary in 2020. She was preceded by 1983-batch IAS officer Subash Chandra Garg who served as ED for a three year term in 2014, later returned as the economic affairs secretary in the Ministry of Finance in June 2017.
Experts also said that these positions involve international salaries which the government salaries cannot match.
“These are significant positions and you can make a lot of difference. Generally these postings are from the finance ministry or sometimes economists. WTO has been given to IAS officers,” said K M Chandrasekhar, former cabinet secretary.
Among economists appointed by the government to such foreign postings is Surjit Bhalla, who is currently serving as the executive director of the International Monetary Fund.
