PMO runs Finance Ministry, Nirmala Sitharaman reduced to a rubber-stamp minister

With Finance Secretary, Subhash Chandra Garg’s exit from the Finance Ministry, it has become evident, according to observers, that it is the PMO which actually runs the Ministry of Finance, not Finance Minister Nirmala Sitharaman in Modi raj 2.0.

Those who are in the know of the development say decision to shunt-out Garg was taken by the mandarins who sit in the South Block, not by Sitharaman who, despite not being fond of Garg, was opposed to a harsh action against him.

But, in this case PMO trumped Sitharaman, said a senior journalist who covered the Finance Minister for over two decades.

According to him, Finance Ministry is suffering from disorientation. Confusion has seeped into the corridors of this ministry so deeply that it is now affecting day-to day operations.

Cancellation of GST meeting scheduled on July 25, at the eleventh hour without any further intimation, is being seen as the side-effect of the interference by the PMO.

“It is very unusual that GST meeting was cancelled in this manner. It seems, Sitharaman has no command over running the day-to-day business,” quipped a Financial expert.

According to sources, in Modi raj 2.0, this process of undermining the authority of the Finance Minister started from the day the Modi government took over.

“Sitharaman had very little role in the Budget that was high on symbolism but lacked substance. It was an official version of Modinomics that was read out by Sitharaman in the parliament,” said an analyst.

Observers believe, Sitharaman who had some standing in Modi raj part one as Defence Minister, has been reduced to a subservient to the PMO, or just a rubber-stamp in Modi raj 2.0.

As far as shunting out Finance Secretary Subhash Chandra Garg is concerned, if one goes by the whispers in the Finance Ministry, it was decided even before the Lok Sabha elections.

Sources say that though there are many reasons as to why Modi wanted to get rid of Garg from the Finance Ministry, his habit of bypassing the “supreme-authority”, irked the government the most.

Multiple dissent notes sent by Garg to the Jalan committee that was set up to decide the modalities to release RBI’s reserve fund to the government, set the scene of his exit.

As per an insider, due to dissent notes sent by Garg, Jalan committee could not decide on the timeline to release the fund.

“It upset the PMO a great deal, creating way for his ultimate fallout from the PMO’s good book,” said the insider.

“Sitharaman does not have that courage or stature that one needs to exercise autonomy,” he added.

Garg’s idea on sovereign bond played a catalyst in his exit from the Finance Ministry.  As per sources, the PMO was unhappy with Garg for not apprising it properly about the consequences of overseas dollar-denominated bonds.

Although two days after his shunting-out, Garg explained his position on bond issue, saying that no one in the government has questioned overseas bond, but it is believed that several former RBI Governors and experts in and out of the government had opposed the sovereign bond issue, saying the overseas sovereign bonds would push the country into a debt trap.

A journalist who had covered Garg in Modi raj part one said, “Garg who had previously served with the World Bank, perhaps failed to understand that in Modi raj 2.0, ‘heaven cannot brook two suns, nor earth two masters’. He had enjoyed autonomy when Jaitley was Finance Minister, who was his Godfather also. But there is no one to save him, he should have understood that”.

Ironically, many in the North Block are not unhappy with Garg’s demotion. They feel, Garg who was instrumental in the exit of the former RBI governors, Urjit Patel and Vimal Acharya, reaped what he sowed.