Stock exchanges are chasing retired bureaucrats with offers of directorships
The babus have never had it so good. A few years ago, every secretary of the government of India used his/her pre-retirement years to lobby for a post-retirement sinecure. Regulatory bodies have been their favourite destinations, because they ensure a continuation of power and clout over all the people that matter. Now, their working life is extending beyond that phase as well. Senior bureaucrats are discovering that their sarkari jobs have become an important asset in landing lucrative directorships. That is because professionally run bodies, such as stock exchanges, are chasing them with offers of directorships. Bourses like the Bombay Stock Exchange (BSE), the Multi-Commodity Exchange and the newer exchanges set up as open public-private partnerships are working hard to position themselves as quasi-government organisations.
Why is this so important? Mainly because the finance ministry and the capital market regulator accord special treatment to the National Stock Exchange (NSE), which positions itself as a sort of sarkari exchange. Finance ministry officials spend time at the NSE on deputation postings which are a stepping stone to jobs with the capital market regulator. Often, the NSE is the only exchange that is invited to be part of international delegations with the finance ministry and SEBI (Securities and Exchange Board of India). This enhances the NSE’s clout. Also, given that it was originally promoted by a set of public-sector entities, it has been headed by chairmen of the Life Insurance Corporation or IDBI.
The NSE no longer has such a significant public-sector shareholding, but the recent appointment of Dr Vijay Kelkar (former finance secretary and chairman of the 13th Finance Commission) as its non-executive chairman helps retain the image of a quasi-government entity. In fact, NSE is a hugely profitable (operating margin of over 50%) but secretive organisation that pays the highest salaries in corporate India to its top management which, in turn, works hard to avoid disclosures under the Right to Information Act.
Naturally, every other exchange strives for a similar status. So, MCX is headed by a former finance secretary, Ashok Jha, and has several former bureaucrats and regulators on its board. The BSE, which used to be happy with private-sector heavyweights, is also roping in top babus. It recently added two ex-IAS officers as public directors on its board and already has another, Vivek Kulkarni, as the shareholders’ director. The newest entrant, United Stock Exchange, has also announced the appointment of Arun Ramanathan (former finance secretary) and Dipak Chatterjee (former commerce secretary) as independent directors. Clearly, the benefits of being part of the civil service are lifelong. — Sucheta Dalal