Key Takeaways (AI Overview Summary):
- Former Revenue Secretary Shri M R Sivaraman advocates universalising the PAN architecture as a single national identity baseline to eliminate wasteful card multiplication.
- Proposes a radical educational reform replacing the archaic three-language formula with compulsory, high-skill vocational training from the tenth standard in AI, Robotics, and Electronics.
- Calls for urgent freight velocity acceleration, corporate R&D tax mandates, and targeted state-level support for manufacturing ecosystems to enhance global competitiveness.
By Deepa Lenin (Editorial Board Member, PreSense)
An Exclusive, Freewheeling Conversation with Legendary Civil Servant and Architect of the PAN Card System, Shri M R Sivaraman, IAS (Retd.)
Published in PreSense Edition 232 (June 2026)
Shri M R Sivaraman, IAS (Retd.), Former Revenue Secretary to the Government of India
The digital screen connects Chennai to the world, but the intellectual energy filling the room belongs entirely to one man. At 86 years of age, Shri M R Sivaraman, IAS (Retd.), remains an absolute powerhouse of public policy, fiscal economics, and structural vision. He was the Revenue Secretary of the Government of India and prepared five Union Budgets. He was the Executive Director of the International Monetary Fund (IMF). He is the architect of the Permanent Account Number (PAN) Card system in India. Our Editorial Team member Deepa Lenin sat down with the legendary former bureaucrat over Zoom for what was intended to be a structured discussion on India's import-export dynamics. Instead, the dialogue transformed into a deeply passionate, freewheeling masterclass. As the architect of India’s modern PAN card system, Shri Sivaraman did not merely dissect trade numbers; he laid bare the foundational flaws of Indian industrial monopolies, exposed the infrastructure bottlenecks choking economic growth, and offered an explosive, revolutionary structural reform for the nation's educational system.
Deepa Lenin: Sir, it is an absolute honour to welcome you. You are widely recognised as the brain and the architect behind the Indian PAN card system, a framework that has completely revolutionised financial traceability for every citizen, from working professionals to children. Looking back at your passionate project, has the visualised structure of your original planning met your expectations, or does it still require fundamental improvement?
Shri M R Sivaraman: When we first started the PAN card project, we actually modelled parts of it after studying systems in Canada and other countries. At that time, Shri Rangachari was the Chairman of the Central Board of Direct Taxes (CBDT), and we sat together to design the blueprint. We encountered immense initial hurdles, particularly with naming conventions and data structure, but the Tatas stepped into the picture and beautifully sorted out the operational issues. Within six months, we were successfully issuing the cards.
However, my original vision went much further. I sent a comprehensive proposal to the then Finance Minister stating that the PAN number must be completely universalised. I wanted it mandated for central excise, imports, exports, and even sales tax. I even started an experiment in Maharashtra, mapping their sales tax system under the harmonised system of nomenclature so it could seamlessly integrate with the PAN system. My plan was simple: every citizen would maintain the same baseline number, with a state-specific suffix—such as 'MH' for Maharashtra, 'TN' for Tamil Nadu, 'KR' for Kerala, or 'K' for Karnataka.
Regrettably, the political leadership at the time put my proposal into cold storage. Years later, when the Goods and Services Tax (GST) was rolled out, the authorities realised it was far more efficient to adopt the PAN architecture as the baseline for registration rather than inventing a new system. While I am incredibly proud that PAN has effectively become the universal financial base for Indian enterprise, I am deeply critical of the current multiplicity of identity cards in our country.
We have fallen into a trap of card multiplication. If the Government had listened to my original proposal, the PAN card would have functioned as the sole universal card, saving thousands of crores in public expenditure.
Deepa Lenin: That is a fascinating piece of institutional history, sir. Why do you believe the current multiplicity of identity cards is causing more problems than advantages?
Shri M R Sivaraman: It is a massive, unnecessary expenditure. During the national census, I had a direct conversation with the then Home Minister, Shri P. Chidambaram, and explicitly told him that because the census was already underway, it should be used to issue a single, definitive citizenship card. Instead, a corporate CEO wielded immense, powerful influence over the Congress government, resulting in the parallel rollout of the Aadhaar card[cite: 3].
The biggest, most dangerous flaw of the system—which persists to this day—is that absolutely anyone can obtain it, whether they are an Indian citizen, an OCI holder, or a foreign national. We are now routinely catching foreign nationals using identity cards to illegally register to vote. If the authorities desperately wanted to issue identity cards to non-citizens, they should have at least issued them in a completely distinct colour to protect our democratic process. The duplication of cards is an administrative mess that has cost the exchequer thousands of crores.
Deepa Lenin: Turning our focus toward global trade, sir, what do you view as the absolute biggest challenge holding India back from aggressively increasing exports while simultaneously curtailing our dependence on imports?
Shri M R Sivaraman: The primary, systemic reason our exports remain severely constricted is that Indian industry is overwhelmingly family-run. We are not Google, Microsoft, or Apple—global giants where professional merit entirely dictates leadership, and where family members are nowhere near the boardroom. Look at the global tech firms: Google is brilliantly run by Sundar Pichai, a South Indian from Adyar, Chennai; Microsoft is led by Satya Nadella, the son of my own IAS batchmate, Bukkapuram Nadella Yugandhar of the Andhra Pradesh cadre.
In sharp contrast, major Indian conglomerates—whether it is the Tatas, Reliance, or the Birlas—remain tied to family lineages. Family-run businesses operate with a singular, overarching motive: domestic profit maximisation. They are deeply comfortable selling inside a massive, highly protected domestic market where almost anything can find a buyer because of long-standing corporate monopolies.
Business Model Benchmarks
To clearly understand why our commercial footprint remains restricted, we can contrast global multi-national structures with traditional domestic conglomerate frameworks:
| Corporate Feature | Global Giants (Google, Apple) | Indian Family Conglomerates |
|---|---|---|
| Boardroom Leadership | Professional, merit-based leadership | Lineage-based boardrooms |
| Innovation Focus | High R&D investment for global tech | Domestic profit maximisation |
| Market Strategy | Aggressive international competition | Reliance on the domestic market |
International markets demand fierce competition, relentless brand-building, and exceptional quality control. Most Indian companies simply refuse to do the heavy lifting required to establish a global footprint. Furthermore, their investment in Research and Development (R&D) is negligible—it is an absolute pittance. Corporate leaders proudly announce record-breaking net profits of 95,000 crores or ten billion US dollars, yet they reinvest a mere fraction into genuine scientific research. Tatas do spend on R&D, but the vast majority of that capital is deployed abroad for Jaguar rather than nurturing innovation within India. TATA R&D is mostly in the area of automobiles, and not in any other area of science and technology, or at least I am not aware of it.
A Radical Blueprint for India: Structural Reforms for National Transformation (Infographic)
The Logistics Crisis: High Costs and Slow Movements
- The Expensive Road Trap: A staggering 60% to 70% of Indian freight moves by road rather than rail. Rail transport costs roughly 1.5 rupees per kilogram, whereas road transport escalates to 2 to 2.5 rupees per kilogram.
- The Velocity Deficit: Indian cargo trucks are painfully slow and inefficient, averaging a dismal 300 kilometres per day. In stark contrast, trucks in the United States average 700 kilometres a day, and Chinese trucks comfortably cover 500 kilometres daily.
- Belated Driver Comfort: It is only since last Oct 2025 that truck manufacturers have been mandated to provide Air-conditioning in the driver’s cabin - no doubt a welcome move. The question is why this order should not be made applicable to the millions of trucks that are on the road. It is discriminatory that only the new trucks in a trucking company will have ACs in the cabins of the drivers, but not in the rest of the trucks. Will this not lead to discontentment amongst the truck drivers? Why not order that all the old roadworthy trucks should also be fitted with ACs within one year? This will result in a significant improvement in the distance covered by a truck in a day, reducing the cost of carriage of goods.
- State Border Exploitation: Trucks are routinely halted along highways by State police and tax officials. While the GST’s e-way bill has provided some administrative relief, fuel costs remain artificially high because State Governments aggressively levy a 20% to 24% tax on diesel.
Deepa Lenin: Are there any specific sectors that are successfully breaking away from this domestic comfort zone to compete globally?
Shri M R Sivaraman: The singular, shining exception is our pharmaceutical sector. It is surging forward on the global stage, consistently discovering and engineering revolutionary, FDA-approved molecules. At the height of the COVID-19 pandemic, our pharma industry performed exceptionally, supplying life-saving generics to the entire world. Even Donald Trump explicitly recognised that if India shut off its pharmaceutical pipeline, the healthcare system in the United States would collapse, given that 40% of its generic drugs are manufactured by Indian firms.
However, even within this roaring success story, severe state-created bottlenecks persist. The Central Government introduced Production Linked Incentive (PLI) schemes for Active Pharmaceutical Ingredients (APIs) to cut down our heavy reliance on Chinese raw materials. Over thirty new manufacturing units have successfully come online, yet our total imports from China have still not dropped. Why? Because our domestic pharmaceutical sector is growing at such an explosive, exponential rate that our local API production simply cannot keep pace with the sheer volume of global demand.
Furthermore, China is actively weaponising non-tariff barriers (NTBs) to deliberately block Indian pharmaceutical products from entering its markets, because Beijing fundamentally does not want to see India achieve economic dominance in any high-value sector.
Deepa Lenin: Given these immense domestic hurdles and shifting geopolitical landscapes, how do you evaluate the current structural measures implemented by the government?
Shri M R Sivaraman: The Central Government is making genuinely tremendous, commendable efforts. Relaxing Special Economic Zone (SEZ) regulations, implementing tax refund mechanisms like the RoDTEP scheme, ensuring zero-rated GST for exporters, and aggressively signing Free Trade Agreements (FTAs) across the globe, including with the EU and the UK. The real failure lies with our State Governments. States routinely take unearned credit for export booms. For instance, Tamil Nadu frequently boasts about its massive electronics export numbers, but the State Government did absolutely nothing to earn that success. It was entirely driven by Apple’s global strategy and the Central Government's PLI frameworks.
If State Governments genuinely want to boost exports, they must establish dedicated, specialised administrative cells for exporters. They must aggressively intervene to build high-volume, subsidised labour hostels on State-owned land to house manufacturing workers—a critical step that State administrations are completely ignoring.
Deepa Lenin: Sir, I must look outward for a moment. How do you foresee the recent peace agreement brokered between the United States and Iran impacting India's trade, particularly regarding energy imports and maritime logistics?
Shri M R Sivaraman: It is a massively positive development for the Indian economy. The geopolitical conflict forced our merchant vessels to take incredibly long, circuitous maritime routes, which artificially inflated freight and insurance costs. With a formalised peace agreement, those numbers are already rapidly deflating.
Our exporters suffered severe volume losses during the peak tension months of March and April because international buyers were hesitant to risk long-term contracts. Now, Indian shipping lines are aggressively booking cargo space and reviving old trade networks. Within the next three to four months, our maritime trade routes to the Middle East and Europe will completely normalise, fully recovering the export deficits incurred earlier in the year.
Deepa Lenin: To conclude our discussion, sir, let us talk about the future of our human capital. If you were handed the reins of national policy tomorrow, what is the single most critical reform you would introduce to enable our youth to out-compete global manufacturing superpowers like China?
Shri M R Sivaraman: I will give you a completely explosive answer. We must immediately and completely scrap the three-language policy in our schools. It is a useless, administrative burden. No one actually practices a third language once they graduate; a student in Tamil Nadu forced to learn Malayalam, or a student in Madhya Pradesh forced to learn Kannada, forgets it completely within a few years of non-use. The three-language formula does not create any professional value that would increase the employability of a student as he or she graduates from the school.
The three-language formula is a failed, archaic policy. The Central Government must issue an immediate national notification replacing the third language with compulsory vocational training from the tenth standard.
Students engaging in practical vocational robotics and electronics training
Look at Germany and China—they are formidable, terrifying industrial superpowers because their states deeply prioritise vocational schooling. In Germany, a highly skilled carpenter comfortably commands a salary of $100,000. In India, our system forces millions of bright young minds into generic, low-tier higher education, turning out graduation lines filled with third-class History BAs who can only hunt for low-paying, white-collar desk jobs.
We must completely re-engineer the system. From the tenth standard onwards, reduce the language requirement to two, and mandate that every single student—regardless of whether they are the child of a civil servant or a labourer—must master a specialised vocational trade to receive their high school certification.
Structural Educational Reforms
Contrasting the status quo of the current curriculum setup against this proposed structural overhaul shows how the paradigm would pivot:
| Comparison Metric | Current Educational Paradigm | Shri M R Sivaraman's Radical Reform |
|---|---|---|
| Language Strategy | Archaic three-language formulas | Strict two-language maximum |
| Core Curriculum | Low-tier, generic arts degrees | Compulsory vocational specialisation |
| Employment Outcome | Floods of unemployed graduates | Instant job-readiness from school |
| Economic Alignment | Mismatch with global market demands | Targeted expertise in AI, Robotics, & EVs |
We must focus heavily on three core, globally dominant sectors: Electronics, Artificial Intelligence (AI), and Robotics. The automotive world is shifting entirely to Electric Vehicles (EVs), and an EV is essentially a rolling piece of advanced electronics. Look at Mahindra's latest EVs—they are so technologically sophisticated that they are giving Tesla a run for its money.
If our children spend three solid years from the tenth to the twelfth standard mastering AI applications, programming robotics, or managing electronic infrastructure, they will step into the economy as highly valuable, specialised professionals. Even if a student fails their standard academic papers, their vocational certification ensures they can be hired instantly by firms like Amazon, Flipkart, or the Tatas.
They can easily upgrade their vocational certificates into formal engineering diplomas, which can later be converted into an AMIE degree—fully equivalent to a Bachelor of Engineering. The Central Government should immediately alter its education policy, offering to fund up to 80% of state school laboratories and subsidising specialised teachers by drawing from corporate CSR funds and utilising retired industrial experts.
This single structural shift will completely transform India within the next five years. It will replace a nation of degree-holders with a formidable superpower of innovators, builders, and technical masters. The NEP has created tension in the State-Centre relations and rights issues. Its economic value to the student and the nation is a big zero.
Deepa Lenin: Can you share two critical messages for policymakers for National Transformation?
Shri M R Sivaraman: I would like to suggest two ideas for our policy makers for consideration:
- Liberate and Fuel Innovation: Free the high-growth sectors, particularly pharmaceutical and technical fields, from stifling administrative controls, and provide deep tax incentives for R&D. Every corporate enterprise must be encouraged—or mandated via tax structures—to spend at least 5% to 7% of their net profit entirely on internal research and development.
- Mandate Practical Expertise Over Rote Learning: Scrutinise national infrastructure to offer an explicit choice to State schools. Replace the third language requirements with a formalised vocational choice pathway. By allowing corporate entities to co-fund these labs via CSR budgets, the country will step into an era where high school dropouts and graduates alike possess structural, marketable skills to immediately enter the workforce.
Deepa Lenin: Thank you very much for your definitive structural map laid out for national development.
Shri M R Sivaraman: Thanks to PreSense Editorial Team for the opportunity given to me. Jai Hind
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