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Negative effects:

May be misused as a political tool against honest officers.

Although ministers and bureaucrats work hand in hand but this may give former greater control on latter sometimes detrimental to officers efficiency.

Compulsory retirement is a desirable approach as the efficacy of a system is determined by the set of incentives facing people who exercise power. As bureaucrats continue to wield enormous power, a guaranteed job provides the wrong incentives. Hence the mid-term appraisal and compulsory retirement might be the much needed bureaucratic reforms in India.