When I see malfunctioning organisations, all too often, the root cause lies in a bad HR process, or a weak set of mechanisms for hiring, firing, incentivising and training. In similar fashion, I think that the proximate source of bad governance in India is poor HR policies of government. Conversely, one of the most important elements of good governance is a well functioning appointments process.
By and large, the UPA has done a good job of recruitment. But I saw a paragraph today by Kumud Das in Financial Express about the recruitment of a deputy governor at RBI which struck me as being all wrong:
A ministry of finance source told FE on Wednesday that the search committee had met in New Delhi on Monday and reiterated the eligibility criterion laid down earlier for the position, which states that the incumbent must have served as chairman & managing director of a nationalised bank for at least two years.
If this is true, it is surely wrong. In these difficult times, we need the best man (or woman) for the job. This goal is hampered by narrowing the selection in this fashion. A meritocracy is one in which the best man for the job gets it, and there are no ifs and buts.
I can think of three outstanding candidates for this job, and none of them were ever chairman and managing director of a nationalised bank. Ruling out these three candidates from the appointments process for this job hinders the quality of the outcome.
Such recruitment policies damage the ability of RBI to grow into a top quality central bank. RBI should draw on the superior HR policies at SEBI as a role model: the recruitment of full-time board members at SEBI (which is equivalent to the deputy governor role at RBI) has no such quota system in the recruitment process.