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Day after abrupt transfer, Subhash Chandra Garg seeks early retirement

A strong dissent note to the Bimal Jalan committee on the RBI's Economic Capital Framework and his role in making sure India moves ahead for external currency sovereign bonds cost Economic Affairs Secretary Subhash Chandra Garg dear

twitter-logo BusinessToday.In   New Delhi     Last Updated: July 25, 2019  | 17:11 IST
Day after abrupt transfer, Subhash Chandra Garg seeks early retirement

A day after he was moved out of the Ministry of Finance, former Economic Affairs Secretary Subhash Chandra Garg has today sought early retirement. Prime Minister Narendra Modi-led Appointments Committee of Cabinet had transferred Garg to the Ministry of Power on Wednesday. Though there would have been no specific change in his position or salary in the power ministry, the finance ministry is usually considered superior to the former. 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.

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.

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.

Also read: Why Subhash Chandra Garg was replaced as Economic Affairs Secretary

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. This sealed Garg's fate, say sources.

Edited by Manoj Sharma

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