Chapter 22 - Indian Economic Service (IES) | A Bouquet of Services by IPS Lohit Matani and IPS Vishal - UPSC PDF Download

Indian Economic Service (IES)

Contributor: Mr. Rohit Chawla, IES 2016 Batch

22.1 Cadre Structure and Overview

Indian Economic Service (IES) was constituted in 1961 with the objective of institutionalizing a core professional capacity within the Government to undertake economic analysis and render advice for designing and formulating development policies, strengthening delivery systems, and monitoring and evaluating the public programs. The Cadre Controlling Authority for IES is Department of Economic Affairs, Ministry of Finance. A distinguishing feature of the service is that its Cadre posts are spread across different Ministries/ Departments of the Central Government dealing with economic and social sectors. It is, therefore, an inter-Ministerial and inter-Departmental service.

The service was conceived by Pandit Jawahar Lal Nehru for formulating and implementing economic policies and programmes of the country. The service is headed by Chief Economic Adviser to the Government of India.

22.2 Roles and Responsibilities

Role of the IES officers can be broadly categorized in terms of economic advice, economic administration and implementation of development policy and programmes. These and other functions of IES officers are described below:

I. Economic Advise:

Under this category, the role of IES officers include budgetary analysis of different ministries/ departments, advising on disinvestment decisions, auctioning of public resources, and advising on the nature and limit of Foreign Direct Investment/ Foreign Institutional Investments in various sectors of economy. The Annual Economic Survey released by Ministry of Finance also comes under the exclusive domain of the IES officers. They also design economic models for important activities like allocation of natural resources (spectrum, oil and natural gas). In their economic advice, they also factor in environment and forest related concerns and laws. For example in Ministry of Agriculture, they advise on the determination of Minimum Support Price (MSP) for farmers, and on the amount of input subsidy to be given to them. In the Ministry of Health, they advise on the determination of health insurance cover and premium. In the Ministry of Pensions and Pensioner’s Welfare, they advise on the targeting of beneficiaries under schemes like Employee Provident Fund (EPF) Scheme and National Pension Scheme (NPS), and also in designing of tax saving instruments. In Ministry of Railways, they are involved in the economic evaluation of various railways projects. Like this they provide important economic advice in all the important ministries or departments.

II.  Design of De velopmental Policies and Programmes:

IES officers provide valuable economic inputs for designing various developmental policies and programmes. In these policies they do economic calculations like calculation of beneficiaries (e.g. by calculating the Below Poverty Line (BPL)), amount of subsidies required, nature of subsidies, and other important details. For example, while designing National Rural Employment Guarantee Scheme (NGREGS), they provided inputs for deciding the daily wage, optimum number of days of employment, and so on. They also set medium term targets to be achieved in these programmes (e.g. the percentage of unemployment to be decreased due to NREGS in 5 years). Moreover, while designing they do the outreach analysis of the programmes (areas and sectors to be covered). They decide on the parameters to be considered in these developmental policies (e.g. Maternal Mortality Rate and Infant Mortality Rate in National Health Mission) and also the input funds to be shared by the Centre and States for implementing these policies and schemes.

III. International Functions:

IES officers are posted in the ‘Multilateral Division’ of the Ministry of Finance. Here they give suggestions for bilateral and multilateral trade and economic agreements, including Comprehensive Economic Partnership Agreement (CEPA), Comprehensive Economic Cooperation Agreement (CECA) with different countries. They also negotiate terms in treaties like Free Trade Agreement (FTA). In a nutshell, they do all the economic related ground work for all the international treaties. Their work is indispensable in any international agreement.

IV. Policy and Programme Monitoring:

IES officers posted in various ministries monitor the implementation of policies and programmes at a broad level. They analyze the data collected at the field level and provide economic feedbacks while the policies are being implemented. E.g. in NREGS they check whether all the beneficiaries are participating or not and the machine to labor ratio is maintained or not. According to their study, they advise modifications in the policy design or policy processes, so as to enhance the impact of the policies. E.g. while implementing subsidies in LPG, the advice rendered by IES officers led to changes in the number of subsidized cylinders allotted to each family.

V.  Policy Evaluation and Impact Analysis:

IES officers posted in different ministries are responsible for undertaking the evaluation of programmes and schemes to study their performance, process of implementation, effectiveness of the delivery systems and impact. These studies are diagnostic and aim at identifying the factors contributing to success/ or failure of various programmes and deriving lessons for improving the performance of existing schemes through mid-course corrections and better design of future programmes.

VI. Other Functions:

Apart from the above functions, IES officers are involved in the following functions:

1. They suggest economic reforms from time to time.
2. They ensure that policy pursued by individual Ministries/ Departments is consistent with the overall direction of economic policy contained in the Union budget, and medium term plans.
3. They also do general administrative tasks in their parent departments like recruitment, human resource development, transfer, postings, performance appraisal, and so on.

22.3 Normal Growth Profile

We will be discussing about the various career opportunities an IES Officer has in a separate topic. However, this topic only deals with various ranks an IES Officer holds during his professional life. These ranks are held when he/ she is working in his/ her main line department/s.

22.4 Recruitment

The recruitment into IES happens through two channels:

1. 60% of the officers are inducted into IES after qualifying in the Indian Economic Service Exam conducted by UPSC.
2. Rest 40% officers are inducted by promotion of Economic officers or officers holding equivalent posts recognized for this purpose as feeder grade by the Cadre Controlling Authority.

For applying in the Indian Economic Service examination, the minimum requirement for a candidate is a post graduate degree in Economics/Applied Economics/Business Economics/Econometrics from an approved Central, State or foreign university. The examination of IES consists of one paper on General Studies, one on General English, three on General Economics and one on Indian Economics.

22.5 Training

The training of Indian Economic Service (IES) consists of training in various institutions and a component of district attachment. The training starts with a Foundation Course at the Dr. Marri Channa Reddy Institute of Human Resource Management, Hyderabad. Apart from this, probationers undergo training in institutions like National Institute of Financial Management, Faridabad (NIFM) (1 week), National Centre for Agricultural Economics and Policy (NCAP) (1 week), Bureau of Parliamentary Studies and Training (BPST) (3 days), IMF Institute (2 weeks), National Institute of Public Finance and Policy (1 week), Institute of Secretariat Training and Management (1 week), Bankers Institute of Rural Development (1 week), Indian Institute of Capitals Market (1 week), Reserve Bank Staff College (1 week),  Indian Maritime University (1 week), National Law School of India University (1 week), Indian Institute of Management, Ahmedabad (2 weeks), Abdul Lateef Jamil Poverty Action Lab (2 weeks),

However, majority of the IES training is conducted in two phases in the Institute of Economic Growth (IEG), New Delhi. Apart from this officers also have international attachment with the Civil Service Staff College of Singapore. They also have a training of Country Specialization on the neighboring countries on India.

22.6 Variety of Opportunities

Apart from the usual work profile in the State government, IES Officers have ample opportunities to serve in organizations of State, national as well international level.