Ex-Cabinet Secretary on 2G Scam, 26/11, & Politicians

Seasonal Magazine exclusively interviews KM Chandrasekhar ex-IAS, who was for long India’s topmost bureaucrat. As Cabinet Secretary - a post above in protocol to even the country’s three Chiefs of Military Staff - Chandrasekhar was the senior-most civil servant in Government of India, calling the shots, and reporting directly to PM Dr. Manmohan Singh, when momentous developments like 2G scam and 26/11 Mumbai terrorist attack happened. Known equally for his efficiency and transparency, Chandrasekhar explains what really happened behind the scenes during those trying times.

If we go by Victor Hugo’s wit that, “Forty is the old age of youth; fifty the youth of old age,” KM Chandrasekhar is still very much in the youth of his old age. But so are many of his peers, including heavyweights like Vinod Rai and Duvvuri Subbarao. They are even younger, belonging to the famed ‘72 batch of IAS, as against Chandrasekhar’s ‘70 batch. But when they were about to retire, nobody was waiting for them with requests to join, like Kerala Chief Minister was waiting for Chandrasekhar, armed with a unanimous State Cabinet decision to welcome him. 

Maybe a small part of the riddle was that luminaries like Rai and Subbarao were not too keen to come down from their glorified posts and occupy something relatively low-key like a small state’s Planning Board Vice Chairmanship. But surely, a greater part of the riddle is that KM Chandrasekhar is uniquely in demand. In fact, he has always been in demand. That was why India’s Civil Service Rules were amended a record three-times to give extensions to Chandrasekhar’s tenure as India’s Cabinet Secretary. 

Secondly, it is obvious that Chandrasekhar had no qualms working in a lower-post, post-retirement. That reveals a rare quality that speaks volumes about his character. As India’s Cabinet Secretary, he was above in protocol to even the country’s three Chiefs of Military Staff. Directly reporting to the Prime Minister, the Cabinet Secretary is the senior-most civil servant in the Government of India, who heads the Cabinet Secretariat, the Indian Administrative Service (IAS), and the Civil Services Board, as well as all civil services under the rules of business of the GoI. So, there is no doubt that Chandrasekhar has voluntarily come down more than a notch, when he chose to heed Kerala’s request for help. 

But why is he so much in demand even after retirement age and multiple extensions? Theodore Roosevelt, one of America’s greatest Presidents ever, would have given a ready answer - “Old age is like everything else. To make a success of it, you've got to start young.” 

KM Chandrasekhar was blessed to have as his father Kesava Menon who was Chairman of India’s Railway Service Commission. Born in Kerala, and brought up largely in Delhi, young Chandrasekhar was an academically bright boy. He attended Delhi’s famed St. Stephen’s College where he did BA (Honours) in Economics. Later, he did MA (History) from University of Delhi, and went abroad for MA (Management Studies) from University of Leeds, United Kingdom. 

One hallmark of Chandrasekhar’s IAS career was that he has left his mark of efficiency in whatever small and large assignments came his way. A Kerala cadre IAS officer, he has embraced opportunities across the spectrum, whether it is in Kerala, at the Centre, or overseas. Some of his noted assignments include Director of Fisheries, Kerala; Managing Director, Civil Supplies, Kerala; Chairman, Spices Board of India; Joint Secretary, Ministry of Commerce; Deputy Chief of Mission, Embassy of India, Brussels; Ambassador & Permanent Representative of India to the World Trade Organisation (WTO), Geneva; and Revenue Secretary, Government of India. He also knows industry inside-out, as he has been either Chairman, CEO, or Director of over 40 public as well as private companies. 

While serving as Revenue Secretary, he was instrumental in ensuring consistently high revenue collection and for ushering in systemic changes in revenue administration, procedures and policy. He was well-liked by both UPA and NDA camps due to his effectiveness, with Vajpayee appointing this IAS officer as Ambassador to WTO by overcoming stiff resistance from IFS camp, and Dr. Manmohan Singh selecting and extending his tenure as Cabinet Secretary thrice. 

Senior officers who are super-efficient like Chandrasekhar normally tend to be tough taskmasters known more for their arrogance and roughness. But KM was known and loved by everyone for his gentlemanly and understated power. 

He was PM’s trouble-shooter more than once. It was he who spearheaded the action-plan for UPA-II’s first 100 days, even before the Government was sworn in, which attracted widespread appreciation. It is another story that UPA-II started fumbling soon after the first 100 days, when the impact of the global financial meltdown started becoming felt. Again, to clean up the Commonwealth Games mess of Kalmadi & Co, it was KM Chandrasekhar whom Dr. Singh handpicked and gave overarching powers, which was yet another job KM executed with elan. 

But there were limits. 

When the 2G probe came up before JPC, Chandrasekhar was determined that he would disclose his earlier recommendation to PM that Rs. 35,000 crore could be potentially collected as entry fees if an auction was resorted to. 

But if anybody though that it was due to a falling out with PM, nothing could be farther from the truth. KM was just being transparent with what PM had requested him to study, and what the study’s outcome was. There was no overt political stances from Chandrasekhar. 

Later, when Supreme Court itself clarified that revenue maximization through auction was not the sole route to ’common good’, Chandrasekhar was candid and non-attached enough to appreciate it. 

In fact, this transparency was evident throughout our interview with him. Unlike most other senior IAS officers we had interviewed, no question was out of bounds with him. He answers precisely and with logic, like someone who has nothing to hide but everything only to share. 

While we listened to this retired but still-in-service civil servant’s answers to our probing questions regarding issues past, present, and future, that his work has helped influence, we realized why philosopher Thomas Carlyle once remarked that, “Old age is not a matter for sorrow. It is matter for thanks if we have left our work done behind us.”

Seasonal Magazine in conversation with KM Chandrasekhar, former Cabinet Secretary, and current Vice-Chairman of Kerala State Planning Board:

You had deposed before the JPC that you had written to PM Dr. Manmohan Singh that a total of Rs. 35,000 crore could be collected as entry fees to 22 circles in 2G allocation. But the allocation subsequently went for less than one-twentieth of that amount. Were you unhappy with that development? But don’t you think such cheap allocation aided the mobile telecom boom in this country since 2007-08, resulting in cheaper call rates for the masses?

The Prime Minister had specifically asked me to look at only revenue issues relating to 2G spectrum. There was no direction to look at other issues, which were under consideration of other Departments and the PMO. My estimation was based on factors like inflation over the last six years (since 2001), increase in the quantum of spectrum allocated and increase in teledensity. With regard to the second part of your question, the Supreme Court has already gone into it in response to the Special Reference made by the President of India. In Para 112 of the Hon’ble Supreme Court’s decision, the Court says, “The overarching and underlying principle governing ‘distribution’ [of natural resources] is furtherance of common good.” It goes on to say in the same paragraph, “Distribution has broad contours and cannot be limited to meaning only one method, i.e. auction. It envisages all such methods available for distribution/allocation of natural resources which ultimately subserve the common good. ”In para 119, the Hon’ble Court says, “The norm of ‘common good’ has to be understood and appreciated in a holistic manner. It is obvious that the manner in which the common good is best subserved is not a matter that can be measured by any constitutional yardstick – it would depend on the economic and political philosophy of the government. Revenue maximization is not the only way in which the common good can be subserved.”

Do you agree with the ex-CAG’s view that there was a huge loss to the nation due to 2G allocation? If there was a loss, was it just presumptive? Wasn’t the government just following TRAI recommendations?

This matter is under consideration of Parliament, which has appointed a Joint Parliamentary Committee. According to media reports that I have come across, the JPC has already finalized its recommendations.

A recently released book, 'The Siege', on 26/11 Mumbai terrorist attack, by British investigative journalists Adrian Levy and Cathy Scott-Clark claims that you as Cabinet Secretary as well as the then Joint Secretary (Internal Security) warned NSG Chief Jyoti Dutt against mobilisation of their forces without orders, and that it contributed to a delayed response by NSG. Is there any truth in this allegation?

I never met the authors you mentioned. I do not recall ever having told Jyoti Dutt to de-mobilize; on the other hand I told him to be prepared for action. It would have been foolish on my part to ask him to de-mobilize. The Maharashtra State Government initially wanted the support of Marine Commandos, located in Mumbai, who were mobilized with the help of the then Chief of Naval Staff. The dimensions of the problem were then not entirely clear. Later, I suggested to the Chief Secretary that NSG may be deployed. He agreed with my suggestion and also assured the necessary logistic support, whereupon I told Dutt to proceed.

You were once regarded as India’s most powerful bureaucrat, getting extensions, as well as over-riding powers in corrective initiatives like in Commonwealth Games. You were also instrumental in coming out with the first 100-day work plan for UPA-II Government. How do you regard such far reaching powers, and were you subsequently disappointed by Government’s later day performance?

I did not at any time feel particularly “powerful”. Through out my career, I have endeavored to do my best in respect of any task that was assigned to me. Sometimes, one succeeds, while, at others, there is a perception of loss. I agree with Ambassador Robert D. Blackwill, who, in a recent online publication of the Harvard University’s Belfer Center for Science and International Affairs, wrote, “If the Duke of Wellington never lost a battle, most generals do and so will you. Expect periodic policy defeats and energetically move on to the next challenge.”

You were a staunch opponent of including CBI, NIA, and NatGrid from RTI. What was the rationale, and where does this issue stand today? Do you think RTI has the potential to be misused?

As far as I understand, all intelligence and investigative agencies that deal with matters involving national security are exempted from the provisions of the Right to Information Act. This is required in order to maintain a certain level of secrecy in matters that have serious implications in respect of the security of the country. I have always held that the Right to Information Act is a landmark legislation but it could be misused particularly by giving wrong interpretations to decisions taken by the administration in good faith. In my view, to protect innocent victims, there is need for a strong Privacy Act and also that provisions relating to defamation in the existing law should be strengthened so that misuse of the RTI Act can be curbed.

Were you happy when the KM Chandrasekhar Committee report on FIIs/QFIs were accepted by SEBI? But in lieu of implementing global standards, has come in simplified KYC norms and no need for pre-registration. Don’t you think that due to this black money of Indian origin can easily be invested in India anonymously? Even with the existing regime, it is said that SEBI has no way to know who all are the real investors behind many FIIs?

I was neither happy nor unhappy as this is only one of many reports that I have prepared and submitted during my career. The KYC requirements have only been put on par with other growing countries. “Black money” is not dealt with by SEBI; it is dealt with by the Department of Revenue through its organs, the Directorate of Enforcement, the Financial Intelligence Unit and the Investigation Wing of the Income Tax Department. In recent years, the Department of Revenue has substantially strengthened its capacity to deal with the problem of black money. Banks are required to submit details of large transactions as well as suspicious transactions. The Income Tax Act also has provisions to trace expenditures to incomes through annual information reports. The Department has made substantial progress in establishing a strong computer base. Besides, India has become a member of the Financial Action Task Force, comprising of all major countries and has also signed bilateral agreements with many countries for exchange of information.

Having worked with politicians all your life, both at the state and central level, how confident are you regarding the integrity and commitment of our leading politicians of major parties? Do they really meddle in the activities of honest bureaucrats?

I have worked quite closely with politicians and got on famously with most of them. I have also learnt a lot from some senior Ministers both in the State and at the Centre. I cannot say that I was under pressure to do something which was incorrect or legally improper. 

Your father was Chairman of Railway Service Commission. How much were you inspired from that exposure to pursue a role in India’s bureaucracy? 

In the late 60’s and in the 70’s, government was the dominant player in the economy and polity. Job opportunities in other sectors were limited. Also, the general belief prevailed that government jobs are the safest and the best. There was a tendency therefore for academically strong young men and women to gravitate towards government jobs. This was particularly visible in a place like Delhi which was at that time a city dominated by government functionaries and government offices. Of course, my father did want me to enter the civil service and this played an important role in my decision. 

You have studied at leading colleges in India like St. Stephen’s, Delhi University, and University of Leeds, UK. How far would you give weightage to your education, in your career, and how important was your subjects - history and management - in your success?

While academic background helps, I am of the opinion that, in government, one learns far more on the job. Government jobs even now give a great deal of freedom to be creative and effective. Also, the Indian Administrative Service gives the officer an opportunity to work in a wide variety of jobs and to deal with changing environments and changing economic and political philosophies. One, therefore, learns to adapt to situations fast and to react quickly. 

You have been well-settled now as Kerala State Planning Board’s Vice Chairman. How would you assess the top-three challenges faced by the state, especially based on your last two years‘ experiences?

I think the major concern really is that vested interests, both political and commercial, have a tendency to block developmental programmes. The single most important requirement for the State is the convergence of all shades of opinion in favour of development. Unless this happens, the State, which has the potential to rival even many of the developed countries in terms of growth and productivity, will not be able to move forward with sufficient momentum. We have problems relating to infrastructure, skill development, higher standards in education, an aging population, lifestyle diseases and so on, but the most important requirement is consensus on development. 

If the Raghuram Rajan Committee report gets implemented, will the Central assistance to Kerala fall to 0.38% from the current 1.5-2.5%? How are you countering Rajan Committee’s findings?

The Chief Minister has already written to the Prime Minister, expressing his apprehensions regarding the report of the Committee. As far as I know, similar letters have gone from the Chief Ministers of Tamil Nadu and West Bengal. The 14th Finance Commission has already been constituted and is working on allocation of resources to States on the basis of parameters determined after extensive consultation with the States as well as Central Government. I have read somewhere that the Committee report is under the consideration of the Planning Commission which has serious reservations regarding the recommendations made. At this point, therefore, I do not think that there is any likelihood of the report being implemented.

How do you assess the prospects of the planned Aeropolis Project near Thiruvananthapuram International Airport?

The feasibility report for the aeropolis project near Trivandrum is being prepared by the KSIDC. 

You have been a great proponent of productivity and target-based action plans for bureaucrats. How does Kerala fare in this regard?

I think Kerala is the only State which came out openly with an assessment of performance of Departments under the Results Framework Documents system. I think this is being given high priority by the Chief Minister and the Chief Secretary. Besides, we are putting in place systems for real time evaluation of Plan performance as well as performance of Local Self Government institutions. A system of awards has also been instituted to encourage government departments and organizations to do better and achieve their targets. 

What have been Kerala State Planning Board’s main recommendations under your tenure, that you would like to see implemented?

The Planning Board is essentially an advisory body. Its recommendations are encapsulated in the Approach Paper to the 12th Plan, the Annual Plans that are prepared each year and the Perspective Plan 2030 which is now available on Government and Planning Board websites for public comment. The Planning Board has also played a role in revising guidelines for ensuring greater flexibility and procedural simplicity in implementation of projects by Local Self Government institutions. It has put in place systems for Plan monitoring, assessment and evaluation. It looks at issues of critical importance in the area of infrastructure, such as power, coastal shipping, inland waterways, railway systems and others. It has set up a Project Financing Cell with the intention of finding external resources for the State’s development. It is in the process of creating a mechanism for identifying the most backward Blocks in the State for special attention on the lines of the Nanjundappa Committee set up by the Karnataka Government in the year 2000. The Planning Board endeavors to work in close collaboration with Government Departments and Government organizations.