'I would text Jaitley 10 times...was very disappointed with GST': Ex-CEA on leaving North Block

Former Chief Economic Adviser Arvind Subramanian has denied long-standing speculation that his exit from the finance ministry was driven by a breakdown in relations, saying it was a natural time to go after completing four years in office. He acknowledged that there were differences with the government but said the exit was not driven by them.

"No, that's not the case," the former CEA said when asked about discussions that there were serious differences between him and the Centre. "It was a natural time for me to go. Four years had passed. And at that time Arun Jaitley ji's health was also not very good - he had undergone a kidney transplant and all that."

Subramanian said he felt that continuing beyond four years would have reduced his effectiveness as chief economic adviser. "I honestly felt that four years were over, and that my effectiveness as CEA by continuing would not be as much as it had been over the previous four years. For a lot of reasons, including some differences with the government, but also because if Arun Jaitley ji's support was not going to be there to the same extent, then effectiveness would also reduce," he said during a discussion on his book 'A Sixth of Humanity' with Lallantop's Saurabh Dwivedi.

He added that personal considerations also played a role. "But mostly because I felt that we had done four years. It was fulfilling and comforting, and there were personal issues because of which I wanted to go back."

When asked to spell out the differences he referred to, Subramanian pointed to GST as a key example. "For example, look at what happened with GST. What I had recommended - a simple structure - which has now finally been done, I had recommended only three slabs, which has now happened. But earlier there were 10–12 slabs," he said.

Recalling his exchanges with Jaitley during the GST rollout, Subramanian said: "I used to speak to Arun Jaitley every day; I would text him 10 times saying, 'Minister, this 28% slab should never exist.' We should have had a small slab of 6–8%, one of 15–16%, and one of 40% for what we call sin goods, like cigarettes and tobacco products."

Subramanian said he was disappointed at the time by the complexity of the GST structure but accepted that such outcomes were part of an adviser's role. "At that time, I was very disappointed that the structure was not simple. But it was something I had no control over," he said.

Reflecting on the limits of influence within government, he added: "Look, the role of an adviser is to give advice and to try to persuade people. But if you don’t persuade people, I think that comes with the territory. You are not going to win every battle. You will be somewhat successful, often unsuccessful."

Subramanian served as chief economic adviser from October 2014 to June 2018, during Arun Jaitley's tenure as finance minister.

The former CEA said advisers should not walk away simply because their advice is not accepted. "One should have thick skin; similarly, you must also not have the vanity of saying, "Oh, my advice wasn't implemented, so I'm running away from here.' That shouldn’t happen. And that is also a lesson I took away from that experience."