Reformist US-based economist is appointed chief advisor

New Delhi: With two top level appointments in a day Union Finance Minister Arun Jaitley is back in action and that too in top gear. He had spent a good part of September convalescing from diabetes related complications, and had resumed working earlier this month, but was taking it rather easy.

However, by shunting the UPA-appointed  secretary for economic affairs Arvind Mayaram (1978 IAS batch) to the relatively low profile ministry of tourism and getting his batch mate, the pro-reform Rajasthan chief secretary Rajiv Mehrishi, to replace him, the finance minister has made a significant move towards next year’s budget preparations.

In addition, after some flip flops, Jaitley has also appointed US-based development economist Dr Arvind Subramanian as the chief economic adviser (CEA) to the government. Subramanian, who is an associate of the RBI governor Dr Raghuram Rajan from his days at the International Monetary Fund, was tipped for this post sometime back, but was then ruled out considering that he had been critical of some of the decisions taken by the Modi government.

For instance, Subramanian had termed Jaitley’s maiden Budget as “disappointing but retrievable”. Calling it a “budget prepared by incumbent bureaucrats, not incoming politicians”, he had said it represented continuity when the need of the hour was change. Recently, Subramanian criticized the Indian government’s decision to derail a WTO deal struck last year to streamline trade procedures by tying it to a separate controversy over food subsidies.

However, this indeed is the traditional role of the Chief Economic Advisor who is responsible for the preparation of the economic survey that forms the basis of the budget proposals. With some element of dichotomy, he is an insider who brings an outsider’s perspective to the entire process. Apparently, the fact that he can get along well with Dr Rajan seems to have played a major role in this decision.

An alumnus of the IIM-A and St. Stephens College, Delhi, Subramanaim said after his appointment as CEA: “I have just taken charge as CEA. It is an absolute honour and privilege to come at this time, a time of great hope and dynamism for the economy to serve in the Government that has mandate for a reform and change.”  He added that macro-economic stability and creating favourable conditions for investment will be his priorities. A prolific contributor to various journals, Subramanian has advised the government in different capacities, including as a member of the Finance Minister’s Expert Group on the G-20. His book India’s Turn: Understanding the Economic Transformation was published in 2008 and Foreign Policy magazine has named him as one of the world’s top 100 global thinkers in 2011.

The chief economic adviser’s post had been lying vacant since Rajan shifted to the Reserve Bank of India as governor in September last year.

Subramanian, who is an alumnus of the Indian Institute of Management, Ahmedabad, has a doctorate from Oxford University and has taught at Harvard University’s Kennedy School of Government and at John Hopkins’ School for Advanced International Studies.

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Free Press Journal