‘Merit-based civil service will boost growth’

Investment bank Goldman Sachs has estimated that civil service reforms that include a bureaucracy that is merit-based rather than seniority-based, could add nearly a percentage point annually to India’s per capita growth, which stood at 3.4 per cent last year.

The report reiterates recommendations from the Administrative Reforms Commission (ARC) such as reduction in the age for entry and the number of attempts allowed for civil service aspirants, and encouraging lateral entry of technocrats from the private sector.

“We estimate that if India were to pursue civil service reforms and reach the Asian average on government effectiveness, it could add 0.9 percentage points annually to per capita GDP... Institutional quality is a crucial driver of economic performance.”

It will take India a decade to reach the Asian average on government effectiveness, it estimates.

To achieve this, the report said: “As previous reform commissions have argued, the structure of the civil service, which is largely unchanged since Independence, might benefit from a greater focus on merit rather than seniority for promotions and incentives for good performance.”

The report suggests two reviews – after the seventh year and the 15th year of service – to determine if the civil servant should continue in service following the second evaluation.

Even though the median age in India is 26, due to seniority being the main criterion for promotion, the highest ranking civil servant in each ministry is usually in their late 50s and early 60s and only a few years away from retirement.

By contrast, the average age of senior bureaucrats in the U.S. and China is 54 years to 55 years.