SC Garg: Quit service because had ‘unpleasant’ work equation with Sitharaman, Modi 2.0 was more populist

• 'She, for reasons not very clearly known to me, came with some pre-conceived notions about me,' Garg wrote in a blog post

• 'The government was turning populist as well. As part of a 100-days programme, a number of announcements were made aimed to please specific constituencies,' said Garg

New Delhi: Former Finance Secretary Subhash Chandra Garg has said that an "unpleasant" professional relationship with Finance Minister Nirmala Sitharaman and a shift in focus within the government from bold reforms to populist reforms in 2019 were the reasons behind him seeking voluntary retirement from service. In a blog post that comes exactly a year after he sought voluntary retirement from the Indian Administrative Service (IAS) on October 31, 2019, Garg said that his professional relationship with Sitharaman was strained quite early on after she took charge of the ministry in May 2019, and within a month, she had insisted on his transfer. And since, he did not wish to work outside the Ministry of Finance, he decided to quit service.

"Dr PK Mishra, then Additional Principal Secretary, who oversaw appointments and transfers in the PMO, asked me to come over for a chat on 18th July. He knew of the situation fully. In fact, we had discussed my relationship with Mrs Sitharaman on a few occasions before as well. Both of us agreed that the best course would be for me to make way for the new FM to 'function smoothly,'" said Garg in the blog post on Saturday.

'Sitharaman had a very different knowledge endowment, skill set'

While stating that working with former Finance Minister Arun Jaitley was "the best of the time personally and professionally," Garg wrote, "Arun Jaitley, with whom I spent most of my time in the Ministry of Finance, was a mastermind with an uncanny ability to sift through massive amounts of information and government files to discover the pith and substance of the public policy issue involved. He also had right temperament and ability to forge consensus."

However, "The new incumbent after the elections, Mrs Nirmala Sitharaman, had a very different personality, knowledge endowment, skill-set and approach for economic policy issues and also for the officers working with her. It became quite apparent very early that working with her was going to be quite difficult and it might not be conducive to undertaking necessary reforms for the attainment of the objective of building a $10 trillion economy of India," said Garg.

"She, for reasons not very clearly known to me, came with some pre-conceived notions about me. She did not seem to have confidence in me. She was not quite comfortable working with me as well. Serious difference also developed on some key issues like economic capital framework of RBI, package for dealing with problems of non-banks, resolution of non-banks, partial credit guarantee scheme, capitalisation of non-banks like IIFCL and other financial entities and the like. Very soon, not only had our personal relationship soured, but the official working relationship also become quite unproductive," said Garg.

'Modi 2.0 turned poplulist, reform agenda for $10 trillion economy was side-tracked'

While noting that the situation after the 2019 elections, unfortunately, took a turn for the worse, Garg said, "The government did talk about making India a $5 trillion economy by 2024-25 after the elections and winning a great majority. But the reform agenda and the investment plan for attaining the goal of $10 trillion economy articulated in the Interim Budget 2019-20 however, got side-tracked and was virtually forgotten."

"The government was turning populist as well. As part of a 100 days programme, a number of announcements were made aimed to please specific constituencies. Reform agenda was acquiring tinge of being more short term and tinkering type. I had expected the Government to take the requisite bold reforms in first six months. However, this did not seem to be the case," he said.

'Union Budget 2019-20 was a recital of great work done in previous 5 years'

Commenting on the Union Budget of 2019-20, the former bureaucrat said, "The main budget 2019-20 presented on 5th July was a recital of great work done in the previous five years. It did not, however, have a single major economic reform. Some proposals for reforming sectoral foreign direct investment limits, issuing foreign currency sovereign bonds, selling share below the 51 percent limit in case of public sector, which I could push through, were not good enough to alter the course of economic system materially."

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Explaining the rationale behind seeking voluntary retirement, Garg said, "I was getting quite disappointed. I sensed that the opportunity to work on big and bold economic reform agenda was slipping away. If there was no good opportunity to work on reform and building of $10 trillion dollar economy, there was no great fun in working in the government." 

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