Review may delay policy reforms

Exit of four key FinMin officials month-end to leave a void

A temporary lull in key economic and policy reforms is likely, with four top officials in the Finance Ministry demitting office this month end, and Prime Minister’s key advisors, Montek Singh Ahluwalia and C Rangarajan undertaking a review.

Economic Affairs Secretary R Gopalan’s three-month extended tenure ends on July 31. Chief economic adviser Kaushik Basu too demits office the same day. In addition, S K Goel, Chairman, Central Board of Excise and Customs, and Laxman Das, Chairman, Central Board of Direct Taxes, also retire on July 31.

The government is yet to find a successor to Basu, although the names of UN Assistant Secretary General Ajay Chhibber, IMF economist Raghuram Rajan and IDFC Managing Director and CEO Rajiv Lall are doing the rounds.

Rumours are also abuzz that Basu, who has emerged as a key link between the Finance Ministry and the PMO, could get an extension. But, it is still not clear if the economic advisor will stay back leaving his teaching job at Cornell University for good. His contract with the American institution ends in September.

Basu’s term was originally supposed to end in February this year, but he was given an extension to help the government complete the budgetary exercise for 2012-13. Unconfirmed reports say Gopalan could also get another extension. In such a scenario, the decision-making process may be slow, as the new incumbents may take some time to get a firm hold on their portfolios.

Although the government’s top advisors, Planning Commission Deputy Chairman Ahluwalia and Prime Minister’s Economic Advisory Council chairman Rangarajan, have held several consultations with industry bodies on giving a fresh push to economic reforms, which are likely to take time.