Punditocracy’s pugnaciousness destabilises democracy’s diktats. The large influence wielded by a small cabal on the national and even global discourse is a menace to merit. With the world being reduced to a global village, they try to subvert the process in filling institutional posts and meddling in policy framework. In India, they are now busy drafting architectural plans of the 16th Finance Commission. The term of the 15th Commission has expired. According to the Constitution, the next one has to be appointed by November for a three-year term. The commission’s cardinal responsibility is to frame the distribution of financial resources between the Centre and the states. But during the past few years, it has been denying states the funds they think they deserve. Macro finance wizards feel that the commission’s composition has politicised it.
The Prime Minister’s Office (PMO) has launched a talent hunt for new members in consultation with Finance Minister Nirmala Sitharaman to find people who pass the dual test of merit and desirability. Since the 16th commission’s report is expected in 2026, the recommendations would raise a political storm and become yet another test for cooperative federalism and an issue for the 2029 Lok Sabha elections. For the prime minister, the choice of the commission head is between a credible political leader with an economic and finance background, or a retired civil servant with a proven record of loyalty and flexibility.
All the prime minister’s men
Historically, only politicians were chosen as Finance Commission chairmen. Of the fifteen so far, around ten have been eminent political leaders. Nehru chose West Bengal leader K C Neogy to head the first commission. There were heavyweights such as Brahmananda Reddy, Y B Chavan and K C Pant. The trend of politically accredited commission chiefs continued till 1998, when Atal Bihari Vajpayee stopped the trend. That year he appointed Prof A M Khusro, an economist, as chairman. Since then only technocrats or economists have occupied the chair. Dr Manmohan Singh picked Dr C Rangarajan, Vijay Kelkar, and half-economist Y V Reddy, a former civil servant.
Modi has stuck to the path. He appointed N K Singh, a retired IAS officer and man for all seasons, as chairman of the 15th Commission in 2020—but for the wrong reasons. Singh had served as revenue secretary, secretary in the Prime Minister’s secretariat, and member of the Planning Commission during the NDA regime. He joined the Nitish Kumar bandwagon later and became a JD(U) Rajya Sabha MP. At 79 years of age, the Teflon babu is perhaps the oldest chairman of the commission. The well-connected ex-bureaucrat with excellent foreign and domestic contacts has his foot in almost every political and corporate door. The buzz is that even at 82, he may get an unprecedented, record-breaking second term.
Since retired civil servants are the flavour of the saffron season, another seasoned mandarin, Rajiv Mehrishi, is floating about in the corridors of power. Like Singh, Mehrishi is a darling of the global corporate network and the lotus leadership. An IAS officer from the Rajasthan cadre, he was home secretary, finance secretary and Comptroller and Auditor General of India during the BJP government. Though active in the right circles, he has maintained a low profile, which is an essential qualification to get a plum post in Modi sarkar.
Should the PM want to accommodate political loyalists as commission chiefs, the frontrunners would be former TMC member and Union minister Dinesh Trivedi, who resigned his Rajya Sabha seat to join the BJP, and Bihar’s former deputy chief minister and finance minister, Sushil Modi. But don’t write off N K Singh’s chances of getting a record second term. That said, the new Finance Commission will wield much less power, as the GST Council has taken over the major responsibility of revenue distribution.
A capitalist compromise
Modi is not known for banality, but this time it was just an office order. An innocuous memo from the PMO extended the term of the nine-member PM’s Economic Advisory Council (EAC-PM) till further orders. The council, which has three full-time and six part-time members, is tasked with advising the PM on macroeconomic and social infrastructure issues. Incidentally, half of them are former bankers or mutual fund managers. Chairman Bibek Debroy is a primarily home-grown economist, while his colleagues have been employed and trained abroad. Other than Debroy, the other two full-timers are Sanjeev Sanyal and Dr Shamika Ravi.
ALSO READ | Women need power, not numbers
The part-timers are Rakesh Mohan, Dr Sajjid Chinoy, Dr Neelkanth Mishra, Nilesh Shah, Prof T T Ram Mohan, and Dr Poonam Gupta. Interestingly, the EAC-PM is dominated by bankers, former and current, or worthies connected with the Brookings Institute, a US think-tank. Sanyal, Mishra and Shah are associated with foreign and Indian banks. Rakesh Mohan, Ravi and Gupta, who have worked for the Indian government and many academic institutions, possess American university degrees. It has to be said that their expertise and foreign connections have worked in India’s favour. Recently, J P Morgan announced that India’s government bonds will be included in its Government Bond Index-Emerging Markets. According to banking circles, this move could boost foreign investment in Indian mutual funds by around $30 billion. In the process, JP Morgan would fatten its wallet more. The credit for this significant decision has gone to Chinoy. However, eyebrows went up regarding Ravi when she was dropped earlier from the council as her name surfaced in an academic controversy.
Modi makes corrupt babus quake
After a lull of almost four years, the PMO is planning to launch a war on officers of doubtful integrity. It has targeted babus from the IAS, IPS, IRS and other allied services. The Modi government has been criticised for going after its political adversaries while mostly leaving bureaucrats untouched. A recent survey by a government agency has found that a large number of officials are not filing annual returns on their assets. Over 15 percent of IAS and IPS officers haven’t complied with the mandatory instructions. When Modi came to power in 2014, he began purging officers with dodgy reputations. Many were either prematurely retired or prosecuted. Top of the list are officials from sensitive ministries such as home, finance, revenue, commerce, health and rural development. Can the sarkar afford to scratch the ‘steel frame’ on the eve of elections? Well, Modi is known for his insouciance to defiance and aggression towards destabilisers.
Prabhu Chawla
Power & Politics
prabhuchawla@newindianexpress.com
Follow him on X @PrabhuChawla