The economy is in the midst of a protracted phase of slowdown and the Budget for 2020-21 is just over two months away but some of the key posts in the finance ministry and the Reserve Bank of India are either lying vacant or going to be vacant soon.
The post (full time) of the expenditure secretary in the finance ministry — a key figure in the annual Budget-making exercise — is vacant after Girish Chandra Murmu was appointed the lieutenant governor of the newly carved-out union territory of Jammu & Kashmir in October, and economic affairs secretary Atanu Chakraborty is holding the additional charge of spending. In fact, Chakraborty himself is scheduled to retire on April 30, 2020. Similarly, finance secretary Rajiv Kumar, who also heads the department of financial services, will superannuate on February 29, 2020.
The government is also yet to appoint a deputy governor (DG) of the RBI after Viral Acharya resigned in July. However, it has already held interviews of scores of candidates and a final announcement on the appointment is expected in a month. Another DG, NS Vishwanathan, who holds the critical portfolio of banking regulations, among others, and was to retire in July this year, has been on a one-year extension.
While technically, the work in a department goes on even when it doesn’t have a full-time head, and it’s not unusual for the government to entrust key officials with additional responsibilities temporarily, urgent filling up of important posts helps speed up policy-making.
Given the daunting challenges to the economy now, appointments must be expedited or successors must be quickly chosen to ensure decision-making doesn’t suffer even a tad, analysts feel. Even if the government wishes to extend the tenure of top bureaucrats handling sensitive economic posts, that, too, should be announced well in advance, they add.
The department of investment and public asset management (DIPAM), which is overseeing the government’s critical disinvestment programme at a time when the Centre is staring at a massive tax revenue shortfall, saw the departure of a secretary in October, less than two months of his joining (for personal reasons). The new secretary, Tuhin Kanta Pandey, was appointed soon after, though.
Economic growth already hit a six-year low of 5% in the June quarter and economists feel the rate of expansion may have even dropped further in the July-September period for the first time since the last quarter of FY13.
Already, citing growth concerns, Moody’s recently trimmed India’s sovereign rating outlook to “negative” from “stable”. Industrial production shrank in September to an eight-year low, while eight core infrastructure industries witnessed their worst contraction at least since April 2005 in September. Exports declined in four of the first seven months of this fiscal, and banks’ non-food credit growth was hovering around a two-year low of 8.79% in the fortnight through October 25.