The Indian Economic Service (IES / Service) was conceived by Pandit Jawahar Lal Nehru for formulating and implementing economic policies and programmes of the country. After independence, economic reconstruction and development was envisioned as one of the foremost objectives and a challenge to the national planners. The most important prerequisite in this development process was the formulation of suitable plans, policies and measures for the effective utilisation of material, financial and human resources. It was in this context that Pandit Jawahar Lal Nehru envisaged the creation of a separate cadre of economists for steering the economic development of the nation.
The initial steps towards formation of the Service can be traced to 1952. On July 26, 1952, the Union Cabinet decided that the Planning Commission appoint a Committee to examine the question of establishing statistical cadres to serve the general needs of different ministries and if possible, of different States in the case of important posts. In pursuance of this decision, the Planning Commission appointed a Committee under the chairmanship of Shri V.T.Krishnamachari, the then Deputy Chairman of Planning Commission. The Committee submitted its report in September 1953, recommending the formation of a service to be known as the Statistical and Economic Advisory Service. These recommendations were circulated to all Ministries for their views. Professor Mahalanobis, the then Honorary Statistical Adviser to the Cabinet, however did not favour the idea of a combined Statistical and Economic Advisory Service as he felt that economic advisory duty should not be mixed up with technical and professional work in statistics. He suggested an alternative scheme for creation of a “Central Statistical Pool”. The scheme of Prof. Mahalanobis was circulated to all the Ministries on the 15th of May, 1956.
Since two different schemes were expressed, the matter was referred to the Economic Committee of Secretaries, before a paper was submitted to the Union Cabinet for its orders. The Economic Committee of Secretaries accordingly discussed the matter on the 4th December 1956 and examined as to which of the two schemes was more suitable to the needs of Government. It was pointed out that in certain Ministries like Railways, Food, Agriculture and Labour it was not merely statistics that was wanted but also economic advice. Advice on price fixation and controls, exports and imports of specified commodities and investigations of an economic character could not be had from personnel trained only in statistics. Nor was it considered practicable for these Ministries to seek ad hoc economic advice from outside economists in respect of these matters.
Orders of the Cabinet were solicited on whether a combined Economic and Statistical Service should be constituted as recommended by the Krishnamachari Committee or whether two separate services should be formed as recommended by the Economics Committee of Secretaries. The Cabinet in its meeting held on 12th Feb 1958 decided that two separate services should be formed; a Statistical Service and an Economic Service. It was further decided that the control of the two services should vest in the Ministry of Home Affairs.
On 23rd August 1958, a Committee chaired by the Cabinet Secretary, decided on the draft rules regarding the Statistical/Economic services. The rules for the two services were to be published separately and independent boards were to be set up.
The Indian Economic Service was constituted on 1st November 1961 and the Service Rules were notified on the same date.
The actual operationalization of service took place in 1964 with the induction of a number of officers who were then holding posts which were identified as posts carrying work relating to economic analysis.
Direct recruitment to the service through all India competitive examination conducted by UPSC started in 1967. The first batch of direct recruit officers joined in the year 1968.
The Indian Economic Service Officers have over the years made significant contributions not only in the Central Government but also in State Governments and regulatory institutions. Officers have served in the states of Madhya Pradesh, Tamil Nadu, Goa, Karnataka, Nagaland, Andhra Pradesh, Meghalaya, Haryana and Uttar Pradesh. Officers have also served in organizations like Telecom Regulatory Authority of India, Competition Commission of India, Central Electricity Authority, Insurance Regulatory and Development Authority, Finance Commission etc.
The Cadre Controlling Authority was advised, on policy matters pertaining to the service, by the high-level IES Board, which was headed by the Cabinet Secretary.
The management of the service is on the basis of the service rules called the IES Rules, first notified in 1961. The service rules, besides constitution of the service, specifies the various grades and sanctioned strength therein, future maintenance of the service, appointment, probation, seniority and conditions of service. The service rules of 1961 have since been superseded by the comprehensively revised IES Rules 2008, which were notified on 6.6.2008. These Service Rules are amended from time to time in accordance with the instructions of the Government. Latest Amendment to the Rules has been notified on 18th February, 2011 following the Cabinet approval to the revised cadre structure of the service.