And so the Securities and Exchange Board of India is going to be packed at the top with government officials.
All the professionals whom Sebi had selected have been turned down, and the government will now provide the vast stock market expertise accumulated in the Indian Administrative Service for regulating a scam-ridden stock market.
In the same way that the insurance regulator, the power regulator and the telecom regulator are also headed by retired IAS officers; indeed, the power regulatory body was headless for something like a year, so that a suitably influential IAS officer could retire from regular service and occupy the slot.
And how much nicer these regulatory slots are, than being just secretaries in ministries? First, they are post-retirement. Then, they have tenure (recall how hard P Chidambaram as finance minister tried to move D R Mehta from his perch as Sebi chairman and you will get the point).
And third, while you have to show due respect to ministers who may have to answer for you in Parliament, you are really your own master. This is bureaucratic bliss. And since independent regulators have been deemed to be essential for the efficient functioning of markets, you even smell of roses.
The tribe of regulators is set to increase, so new territory is going to be captured: soon there will be a regulator for the oil industry, and you can bet it will be an IAS man who is chosen.
Some traditional perches are already IAS pocket boroughs, like the Constitutionally protected post of Comptroller and Auditor General (small companies may need a qualified chartered accountant to do their audit, but audit of the government's expenditure of one-fifth of GDP can be overseen by someone who till the other day may have been monitoring sugar shipments).
And who knows, may be the IAS will even manage to reclaim the post of Reserve Bank governor, by far our most exalted regulatory perch. If you don't need stock market experts to run Sebi, why do you need economists to run RBI?
Surely they teach you everything you need to know about monetary policy when you are at the Mussoorie academy. And if the subject does have hidden mysteries, what are all those deputy governors and executive directors there for?
I can imagine the disdain with which IAS circles will dismiss this criticism. Like businessmen fathers of incompetent sons who would argue that their sons should not be disqualified from the top corporate job just because of their parentage, the IAS will say no one should be disqualified merely because an officer is from the service.
Why, for instance, is an IAS officer less qualified to be Sebi chairman than someone who was overseeing HR at LIC (which describes G N Bajpai, currently the Sebi chairman)? Though Mr Bajpai is doing perfectly well, the IAS have a point.
I would have no quarrel at all if a qualified economist like Y V Reddy (who also happens to have been an IAS officer) were to be made RBI governor. And Pradeep Baijal (also IAS) may do a better job as the telecom regulator than his non-IAS predecessor!
So, no, my point is not that IAS people should be disqualified. It is that the IAS should not arrogate for itself the inside track on all such jobs. There is such a thing as subject expertise, and it should be self-evident that such expertise is important for effective regulation.
Your garden variety IAS officer may dispute even this, but most people who have subject expertise (of any subject) will recognise that such expertise is important, if not critical.
But since the IAS controls the government machinery, is the country's most powerful trade union, and has a number of ruses at its command (eg: keep regulators' pay and perquisites pegged at bureaucratic levels, so that all successful professionals lose interest), it can persist with its pursuit of jobs for the boys.
If that succeeds, it is only a matter of time before the whole idea of sector regulators acquires a bad odour, and the politician sees opportunity to reclaim turf. In short, there is more at stake than jobs for the boys.
