'We don't need 75 ministries, 200 secretaries': TeamLease chairman says civil service reform is overdue

India's civil services need structural reform, performance management, and a fundamental shift in mindset, Manish Sabharwal, Chairman of TeamLease, said during a recent podcast conversation on Bharatvaarta Policy. He argued that the system still reflects outdated colonial-era incentives rather than the demands of a competitive modern economy.

Responding to a question on whether the Indian state remains extractive in nature, Sabharwal said reform must begin the way any large organisation would overhaul its human resources - by fixing structure, performance management, and staffing.

"It's basically the same way that any organization would go reforming its HR. You first think of organization structure," he said, warning that the administrative pyramid has effectively turned into a cylinder. "There are 98 additional DGs in UP. When my father was in the police, there used to be one IG in every state. So the fact that everybody goes to the top is really makes no sense."

Sabharwal, who has served as a Member of the Advisory Board of the Indian Audit and Accounts Department, argued that the proliferation of senior ranks has diluted accountability and distorted incentives.

"We don't need 200 people with the rank of secretary to the Government of India in Delhi," he said, adding that governments globally operate with far leaner top structures. "The US only has 14 cabinet ministers. Japan has eight. The UK has 22. So we need to crush the number of ministries."

The second major fault line, he said, lies in how civil servants are evaluated. "Today, 99% of the people in the Indian Audit or the Indian Administrative Service are ranked outstanding. That makes no sense," Sabharwal said. "If you treat Gadha (donkey) Ghora (horse) equally, it is the gadha who sort of celebrates, and the ghora gets frustrated."

According to him, the system ends up discouraging high performers. "The government punishes its good performers by not punishing its bad performers," he said, making the case for meaningful performance management as a core reform pillar.

Sabharwal also called for deeper specialisation within the civil services, saying the complexity of the Indian economy can no longer be managed by frequent rotations alone. "The generalist is useful. But the Indian economy is so complex that either you pick these generalists and make them specialize over a few years or 25% of positions should be from lateral entry," he said.

He argued that sectors such as infrastructure, economics, and even social policy now require domain experience. "If you want to fix schools, intuitively, you might say smaller class sizes, teacher salaries, and teacher qualifications are what you need. But actually, it needs performance management and governance, which only somebody who has worked in schools can do," he said.

Beyond staffing and structure, Sabharwal stressed the need for a cultural reset. "We need a new tone from the top. Civil servants are not ruling India. They're meant to govern India," he said, noting that the system extends far beyond elite services. "And it's not 6,700 IAS officers. It's actually 25 million civil servants."

The TeamLease chairman warned that civil service reform may now be India's binding constraint, as other sectors have rapidly evolved. "Politics is much more competitive than it used to be. It's much more strategic than it used to be. Business is much more competitive and strategic," he said, drawing parallels with sport and entertainment. "IPL has made cricket much more competitive than the Ranji Trophy ever was. OTT has made Bollywood much more competitive than it used to be. Venture Capital has made business much more competitive."

However, he said, "The civil service incentives, structures, selection, and performance management have not changed."