With the appointment of former IMF economist Arvind Subramanian as the Chief Economic Adviser and Rajasthan cadre IAS officer Rajiv Mehrishi as the finance secretary, the Narendra Modi government has brought in a new team to steer the economy, five months after it came to power.
Mr Subramanian, earlier a senior fellow at the Washington-based Peterson Institute for International economics, is pronouncedly pro-market. He has in the past argued for quicker subsidy reforms, fast introduction of GST, and faster deficit reduction than the temporal target set by the government.
The medium term fiscal policy envisages a progressive reduction of the deficit to three per cent of the GDP by 2016-17.
His appointment is a bold signal from Finance Minister Arun Jaitley, a Ministry official told The Hindu . “Mr. Subramanian was critical of the first budget, but that he still gets this job is a clear signal that the government is serious about reforms.”
Mr. Mehrishi replaces Arvind Mayaram, who has been appointed the new Tourism Secretary. Mr. Mehrishi is known to be pro-market and has been handpicked by Mr. Jaitley.
New CEA flags investment, growth
After taking over as the Chief Economic Adviser, Dr. Subramanian said there would be a two-pronged approach to steering the economy. “For any economy like India, the two big things are macro economic stability and of course creating conditions for rapid investment and growth. While creating opportunity for all segments of Indian society, no one should be left out of this process,” Dr. Subramanian told reporters.
The post of CEA has been lying vacant since Raghuram Rajan left the Finance Ministry to join the Reserve Bank as the Governor more than a year ago.
Former Finance Minister P. Chidambaram welcomed the appointment of Dr. Subramanian as “an excellent choice.
“Dr. Arvind Subramanian has been on the short list of candidates for CEA for many years and I am happy he will begin his tenure under a new Government. He brings to the job rich and varied experience and acclaimed work as a distinguished academic. He is pro-growth and pro-reform and unafraid to speak his mind,” Mr. Chidambaram said in a statement.
