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Critical Topics and Their Significance for the UPSC CSE Examination on August 30, 2024

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On the controversy over lateral entry into the civil services

For Preliminary Examination: Current events of national and international importance

For Mains Examination: GS II - Indian Polity & Governance

Context:

The Union Public Service Commission (UPSC) had withdrawn its advertisement pertaining to lateral recruitment for 45 posts of Joint Secretaries (JS), Directors and Deputy Secretaries (DS) in the government. This follows objections raised by coalition partners and the Opposition as well as the intervention of the Prime Minister’s Office (PMO) about the need for reservation in such lateral recruitment.

Read about:

What is Lateral entry?

What is Union Public Service Commission?

Key takeaways:

The Union Public Service Commission (UPSC) has retracted its advertisement for lateral recruitment of 45 positions, including Joint Secretaries (JS), Directors, and Deputy Secretaries (DS) in the government. This decision comes after objections from coalition partners, the Opposition, and the intervention of the Prime Minister’s Office (PMO) regarding the need for reservations in such lateral recruitment.

Merit System vs. Spoils System

The merit system involves appointing individuals to government positions through a rigorous selection process conducted by an independent authority. In India, this system began in 1858 with the introduction of the Indian Civil Service (ICS) by the British to select officers for the administration. Post-independence, the UPSC conducts exams to select officers for the IAS, IPS, and other central services. The merit system aims to create career bureaucrats who are expected to operate without political bias and provide independent advice to the political leadership.

Conversely, the spoils system operates on the principle that "to the victor belong the spoils," where the ruling political executive appoints its supporters to various government positions. This system originated in the U.S. and continued until 1883 when it was largely replaced by the merit system. Currently, out of over 2.8 million federal government positions in the U.S., only about 4,000 senior positions are directly appointed by the President.

What is Lateral Entry?

IAS and other central service officers with over 15 years of experience are typically appointed as JS to lead various departments, a critical role where they prepare cabinet notes, manage parliamentary questions, and coordinate with other ministries and State governments.

Lateral entry refers to the appointment of professionals from the private sector, public sector undertakings, and academia to senior and middle management positions within the government. Since independence, there have been instances of technocrats being appointed to secretary-level positions, such as former Prime Minister Manmohan Singh, economist Montek Singh Ahluwalia, and agriculture scientist M.S. Swaminathan. The Second Administrative Reforms Commission (2005) and NITI Aayog (2017) also recommended lateral entry to bring specialized knowledge and skills into governance.

Pros and Cons of Lateral Entry

Lateral entry offers tangible benefits. First, it introduces much-needed specialization in niche areas like emerging technologies, semiconductors, climate change, the digital economy, and cybersecurity. Second, it brings fresh ideas from experts, revitalizing the system. Third, it can make career bureaucrats more responsive, fostering positive changes.

However, there are significant limitations. The domain expertise of IAS officers, developed through field experience, is difficult for external entrants to match. Coordination issues may arise between lateral entrants and career bureaucrats, and there is a risk of opacity and conflicts of interest when recruiting from the private sector.

The Way Forward

Notable past lateral entrants have typically been appointed at the secretary level, the highest position in government departments, where they can influence policy decisions and face greater scrutiny. Even if appointments are made at the operational levels of JS, Directors, and DS, they should align with public policy.

In his book The Tyranny of Merit, political philosopher Michael Sandel discusses the pitfalls of emphasizing merit without considering equity. Thus, appointments at these levels should balance technical competence with considerations of reservation and social justice. The PMO's intervention in this recent situation is therefore a positive step.

However, an excessive focus on lateral entry overlooks the bigger picture. The challenges in the system cannot be resolved by a few lateral recruits alone. While there are valid concerns about red tape, inefficiency, and corruption, it is also true that career bureaucrats operate in a difficult environment. Given that the government deals with public funds, the system is bound by numerous rules. Additionally, the government undertakes roles with intangible objectives that the private sector might avoid. These operational challenges are further compounded by excessive political interference. The transformation of the merit system into a spoils system poses a serious threat to the Indian bureaucracy and the institutions led by career bureaucrats.

The autonomy of career bureaucrats is crucial for their effective functioning. This includes reasonable independence concerning postings, tenures, and transfers. In this regard, the Supreme Court judgment in the T.S.R. Subramanian case (2013) emphasizes the need for effectively constituted and strengthened Civil Service Boards at both the Centre and State levels

Follow Up Question

“Institutional quality is a crucial driver of economic performance”. In this context suggest reforms in the Civil Service for strengthening democracy. (UPSC CSE 2020)

Analysing the Gender Budget of 2024-25

For Preliminary Examination: Current events of national and international importance

For Mains Examination: GS III - Indian Government Budget 2024-25

Context:

The Gender Budget Statement consistently reported an average share of 5% of the total budgetary allocations, with marginal ups and downs. This year is special as the share of allocations to pro-women schemes stands at approximately 6.8% of the total budget expenditure for 2024-25

Read about:

What is Gender budget statement?

What is Key highlights of the Budget 2024-25

Key takeaways:

Women-led development has been a central focus in this year's Budget announcements by the Finance Minister (FM). This dedication to empowering women is evident in the budgetary allocations to women-centric programs, as outlined in the Gender Budget Statement (GBS). Notably, the Gender Budget has, for the first time, reached 1% of GDP estimates for 2024-25, with total allocations exceeding ₹3 lakh crore for these programs.

Reasons for the Increase

Since its introduction in 2005-06, the GBS has typically reflected an average of 5% of total budgetary allocations, with minor fluctuations. However, this year stands out as the allocation for women-focused schemes has risen to about 6.8% of the total budget for 2024-25, marking a significant and positive shift from the norm.

The rise in Gender Budget allocations can be attributed to two main factors. One is the introduction of Part ‘C’ in the GBS, which includes programs with less than 30% allocation for women. For example, the PM Kisan scheme in the agriculture sector has been included in Part C with an allocation of ₹15,000 crore, accounting for 25% of the program's total budget. The second factor is the increase in Part A of the GBS, which reports expenditures in schemes with 100% allocation for women.

Previously, Part A constituted 15-17% of the overall GBS allocations until the BE 2022-23. Since BE 2023-24, there has been a significant rise in Part A allocations, boosting the share of women-centric schemes with full allocations to nearly 40%. This change largely resulted from reclassifying the Pradhan Mantri Awas Yojana (PMAY)—both rural and urban—from Part B to Part A. Part B covers programs with 30-99% allocation for women, and previously, only a portion of PMAY was reported there. Starting last year, the entire ₹80,670 crore allocation for PMAY in 2024-25BE has been included under Part A, thus increasing the overall allocations. However, this may not be entirely accurate, as not all beneficiaries of PMAY are women.

Instances of Over-Reporting and Under-Reporting

Over-reporting can be seen in cases like the PM Employment Generation Programme (PMEGP), which supports entrepreneurs in establishing micro-businesses in the non-farm sector. The GBS reported ₹920 crore, or 40% of the total PMEGP allocation, without any explanation for this figure.

Conversely, under-reporting can undervalue the amount spent on women's needs. For instance, this year, the entire allocation for the National Rural Livelihoods Mission (NRLM) is correctly reflected in Part A of the GBS, showing that 100% of its outlay is dedicated to women and girls—a move that should have been made earlier. In 2023-24BE, only 50% of the scheme’s total outlay was reflected in Part B. Although the GBS accurately reported increased allocations for the Ministry of Electronics & IT this year, it overlooked the inclusion of pro-women allocations in schemes for women entrepreneurs such as PM Vishwakarma, SVANidhi, and Stand-Up India.

In another example, the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), which has the third-highest allocation among schemes for women in the GBS, is listed under Part B with ₹28,888.67 crore, representing 33.6% of its total outlay. It’s important to note that women accounted for 59.3% of all person-days under MGNREGA as of December 2023, and they should have received a proportionate share of the MGNREGA budget, yet only 33.6% is reflected in the GBS.

What Comes Next?

These discrepancies can be minimized by providing explanations for the entries in the GBS. Doing so would not only improve accounting accuracy but also facilitate gender audits and enhance gender outcomes in government programs. The inclusion of a third part in the GBS reflects years of expert advocacy for better reporting, but the anomalies indicate that the GBS still lacks a systematic and scientific approach.

While there are clear efforts to reduce misreporting and improve the quality of the GBS, there is still a long way to go. Including rationales for the reported allocations is crucial to ensure that detailed reporting is not just about increasing the reported amounts for women’s development. It should guarantee that actual spending on women is effective across all government programs, which should be carefully planned and designed to meet women’s needs from the outset. Gender-responsive budgeting remains a powerful tool to address gender disparities in the economy

Follow Up Question

Small Industries — Role, importance and challenges

For Preliminary Examination: Small Industries, MSME, Indian Economy

For Mains Examination: GS III - Indian Economy

Context:

Small-scale industries (SSIs) are privately or independently owned and operated businesses that produce goods or services on a small scale

Read about:

What is Village Small Industries (VSI)?

What are Small Marginal and Medium (MSME) Industries ?

Key takeaways:

Micro, Small, and Medium Enterprises (MSME) are businesses categorized based on their investment in plant and machinery or equipment and annual turnover. These enterprises play a crucial role in the economy by contributing to employment generation, fostering innovation, and promoting regional development. MSMEs are divided into three categories:

1. Micro Enterprises: Investment up to ₹1 crore and annual turnover up to ₹5 crore.
2. Small Enterprises: Investment up to ₹10 crore and annual turnover up to ₹50 crore.
3. Medium Enterprises: Investment up to ₹50 crore and annual turnover up to ₹250 crore.

MSMEs are vital for economic growth, particularly in developing regions, as they help in the equitable distribution of income and wealth. Despite facing challenges like access to finance and technological advancements, MSMEs continue to drive innovation and sustainability through targeted support from governments, financial institutions, and larger firms

Follow Up Question