A strong dissent note to the Bimal Jalan committee on the RBI's Economic Capital Framework (ECF) and his role in making sure India moves ahead for external currency sovereign bonds cost Economic Affairs Secretary Subhash Chandra Garg dear as the Appointments Committee of Cabinet (ACC) finally transferred him to the Ministry of Power.
An IAS officer of Rajasthan cadre, Garg will replace Power Secretary Ajay Kumar Bhalla, who has been appointed as the Officer on Special Duty at the Ministry of Home Affairs. He is also tipped to take over as the next Home Secretary upon the superannuation of incumbent Rajiv Gauba in August. The ACC, which constitutes PM Narendra Modi and Home Minister Amit Shah, transferred 12 secretaries and upgraded the post of the same number of senior IAS officers in their respective departments.
However, in this reshuffle, the focus remained on the transfer of Garg. Garg gathered spotlight in August 2018 when he circulated an internal note, claiming the Reserve Bank of India had surplus cash reserves. Subsequently, the ministry sent three letters to RBI -- reportedly drafted by Garg only -- and threatened to evoke section 7 of the RBI Act, which gives the ministry power to force the RBI to act. This further spoiled the "not so cordial relationship" with the erstwhile governor of the RBI, Urjit Patel.
After a committee was formed to address the issue of capital reserves, Garg recommended former governor Bimal Jalan's name to head the panel. Garg wanted the transfer of the surplus at one go and dissented with the other members who pushed instalments. But a major controversy erupted after Finance Minister Nirmala Sitharaman, in her Budget announcement, opted for the external currency sovereign bonds. Most economists, including former RBI governors YV Reddy, Raghuram Rajan, C Rangarajan, and the members of PM's Economic Advisory Council, including Bibek Debroy, Rathin Roy, and Shamika Ravi, criticised the move. Besides, Garg also didn't get any support from inside his ministry. Most other secretaries chose either to keep quiet or criticised the move in private.
The PMO was pushing that the Ministry of Finance must alter the plan and raise the debt in the local currency and relax the norms for them. A leak from the ministry on Wednesday also suggested that the government was planning $10 billion global bond sale in October. This sealed the fate of Garg, said sources. Gujarat cadre officer Atanu Chakraborty, who is part of the ministry's Department of Investment and Public Asset Management, will replace Garg.
Anil Kumar Khachi - an Additional Secretary in Himachal Pradesh - will be the new DIPAM Secretary. Two more Gujarat cadre officers Guruprasad Mohapatra and PO Vaghela are appointed Secretaries at Department for Promotion of Industry and Internal Trade and the Department of Pharmaceutical, respectively. Anshu Prakash will replace Anuradha Sundararajan as new Telecom Secretary as Sundararajan is set to retire this month. Anuradha Mitra has been transferred from the Department of Communications to the Department of Official Languages in Shah-led Ministry of Home Affairs.
Ravi Capoor will join as new Textile Secretary and Additional Secretary at the DOPT. Atul Chaturvedi is elevated to Secretary Animal Husbandry department. RS Shukla is appointed as Secretary, Ministry of Parliamentary Affairs, and GV Venugopala Sarma as the Member Secretary, National Disaster Management Authority, in the rank and pay of Secretary by temporarily upgrading the post. Meanwhile, Umesh Sinha has been appointed as Deputy Election Commissioner, Election Commission.
Published On : 25-07-2019
Source : Business Today
