By Nikunj Ohri
India’s Chief Economic Adviser Arvind Subramanian resigned today after nearly four years, calling it “the best job I ever had, not without controversies sometimes”.
Subramanian is stepping down on account of “pressing family commitments” and will return to the U.S., Union Minister Arun Jaitley said in a blog post earlier in the day. The last date is not decided yet, the chief economic adviser said at a press conference in New Delhi. “The process to find my successor will start soon…The criteria should be competence, competence, competence.”
He took over as the CEA in October 2014 for three years, and was last year given an extension till May 2019, co-terminus with the tenure of Prime Minister Narendra Modi’s government. His decision to step down comes when Jaitley recuperates from a kidney transplant surgery and Piyush Goyal is in charge of the Finance Ministry.
Subramanian is the third Indian-academic economist to return to the U.S. after leaving the government during Prime Minister Modi’s term. In August last year, Arvind Panagariya, professor of economics at Columbia University, quit as the head of panning body NITI Aayog before completing his term. About a year ago, Raghuram Rajan, professor of finance at the University of Chicago Booth School of Business, had decided to leave after his three-year term ended as RBI governor—at least four of his predecessors served for five years.
“Over a videoconference a few days ago, Subramanian informed me that he would like to go back to the United States on account of pressing family commitments,” Jaitley wrote in the blog. “His reasons were personal but extremely important for him. He left me with no option but to agree with him.”
Jaitley said that he had urged Subramanian to continue for some more time after his three-year term ended, but the CEA was “torn between family commitment and his current job”.
Jaitley said Subramanian’s early diagnosis of the twin balance sheet led the government to adopt the macro-economic strategy of higher public investment in the Union Budget of 2015-16.
He credited the CEA for conceptualising JAM (Jan Dhan, Aadhar, Mobile) as a database for availing public benefits, coming out with newer ideas, policy reforms in the sectors of clothing, fertilisers, kerosene, power and pulses.
In reaction to Jaitley’s post, Subramanian took to Twitter to thank him. “Profoundly grateful and humbled by his generous words on announcing my decision to return for personal reasons to researching and writing,” he said in a tweet. “The CEA job was the most rewarding, fulfilling and exciting I have ever had.”
Profoundly grateful & humbled by these extraordinarily generous words by Minister @arunjaitley announcing my decision to return-for personal reasons-to researching & writing. CEA job most rewarding, fulfilling, exciting I have ever had. Many many to thank:https://t.co/kwsRqDrMTB
— Arvind Subramanian (@arvindsubraman) June 20, 2018
At the press conference, Subramanian said that he is happy with the stressed assets resolution framework as an alternative to his idea of a bad bank.
“I did recognise that the NCLT [National Company Law Tribunal] process offers a legal framework for resolving this. I’m actually very happy at this instance that an alternate idea gained traction and that the resolution process is moving well,” he said.
The Double-Digit Growth Challenge
India will find it challenging to achieve double-digit growth in the near future due to the deteriorating external economic environment, Subramanian said.
“To achieve double-digit growth, you need two things—a favourable external environment, which is not the case and you have to do a lot of domestic policy hard work. I think the government has begun to do the latter,” Subramanian said.
He was commenting on interim Finance Minister Piyush Goyal’s statement that India can achieve double-digit growth in the first three months of next year.
Nikunj Ohri is Bloomberg Quint’s finance ministry correspondent.
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