As part of a major bureaucratic reshuffle in the central government, Economic Affairs Secretary Tarun Bajaj was made revenue secretary, while the managing director of Bangalore Metro Rail Corporation Ajai Seth will replace him as the economic affairs secretary.
These and other changes in bureaucratic posts were notified on April 6 by the Ministry of Personnel after approval by the Appointments Committee of Cabinet.
Bajaj has been the economic affairs secretary since April 30, 2020, and was one of the brains behind the 'Aatmanirbhar Bharat' package and part of Finance Minister Nirmala Sitharaman's core team which drafted the 2021-22 Union Budget. In fact, it is believed that Bajaj and Expenditure Secretary TV Somanathan drafted most of Sitharaman’s budget speech.
A 1988 batch Haryana-cadre Indian Administrative Service (IAS) officer, Bajaj is a veteran of the Prime Minister's Office, having served there from April 2015 to April 2020. The proposed National Bank for Financing Infrastructure and Development, which got legislative backing in the recently concluded Budget Session of Parliament, is believed to be Bajaj’s initiative.
After the retirement of Finance (and Revenue) Secretary Ajay Bhushan Pandey on February 28, Bajaj was given additional charge of Revenue Department as well.
Bajaj’s permanent move from Economic Affairs to Revenue (both the secretarial offices are in the same corridor in North Block) comes days after he announced the government’s borrowing plans for April-September 2021 and said that the Centre had decided to give the Reserve Bank of India’s Monetary Policy Committee an unchanged inflation target for 2021-22 till 2025-26.
It was on the same day, March 31, that the Finance Ministry also substantially cut interest rates for small savings schemes. Following an outcry on social media. However, FM Nirmala Sitharaman rolled back the cuts the next day.
If the buzz in the bureaucracy is to be believed, Bajaj has been sent to Revenue Department to steady the ship, so to speak. Even before the COVID-19 pandemic laid rest to any plans of healthy tax revenue receipts, the taxman was missing targets. In 2019-20, there was a Rs 1.45 lakh crore shortfall in net tax revenue, compared to Budget estimates.
The Revenue Department under Bajaj will also have to take a call on whether to challenge international arbitration decisions regarding Vodafone and Cairn Energy retrospective tax cases. Additionally, Bajaj will now be the ‘first among equals’ bureaucrat on the GST Council, which could soon start discussions on bringing petrol and diesel under the nationwide tax.
Bajaj’s replacement in Economic Affairs is Seth, a 1987-batch Karnataka-cadre IAS officer. Currently the MD of BMRC, he has been serving the state administration continuously since 2008. Before that, he worked in the central government for eight years, all of them as part of the Finance Ministry. This included a nearly four-year stint as an advisor in the Asian Development Bank.
Seth’s appointment as Economic Affairs Secretary raises questions as to who will be designated as the finance secretary. As per the norm, the seniormost of the five finance ministry secretaries heading Expenditure, Revenue, Economic Affairs, DIPAM and Financial Services, is designated as the Finance Secretary.
Seth, Expenditure Secretary Somanathan and DIPAM Secretary Tuhin Kanta Pandey are all from the 1987 batch. All are 1965 born and though Somanathan is the oldest of the three batchmates, it is not necessarily a factor. What may end up deciding who becomes the finance secretary will be their date of joining the service.