Since India’s Independence, T V Somanathan will be the second finance secretary to have become Cabinet secretary, the senior-most position in the civil services, also known as India’s steel frame. The first finance secretary to have been elevated to this position was P K Kaul, in February 1985.
It has taken almost four decades before another finance secretary is taking charge of the Cabinet secretariat in Raisina Hill.
So, where did finance secretaries in the past several years disappear after they completed their tenure? Well, one of them became finance minister (we are referring to H M Patel and not Manmohan Singh, who was economic affairs secretary!), and a few of them joined the Election Commission or the Finance Commission. And one of them initially became a member of the Planning Commission and later its deputy chairman.
But the largest number of finance secretaries, about half a dozen, moved to Mint Road in Mumbai to head the Reserve Bank of India (RBI).
Therefore, a question that is being asked in knowledgeable circles today is why Somanathan was not retained in his current job for a couple of more months and later named the next governor of the RBI. His move to Mumbai was widely speculated, given his academic background (a PhD in economics), two World Bank stints for about nine years, two years of economic policy making at the Prime Minister’s Office (PMO), his reputation as a competent as well as trusted civil servant and the fact that at least six of his predecessors over the years headed the central bank.
Remember also that the current governor, Shaktikanta Das, who joined the RBI in December 2018 on a three-year tenure, will complete his extended term in less than four months. Understandably, the naming of Somanathan as Cabinet secretary at this juncture seems to carry as much meaning for the forthcoming trajectory of reforms and restructuring of India’s steel frame as for Das’ future.
For Somanathan, a civil servant who has used his strong academic credentials to frame as well as implement the government’s economic policies, his elevation as the top bureaucrat will be the fulfilment of a goal that he, like most civil servants, must have cherished all through his career. His promotion, therefore, must have also been endorsed by his own desire to see himself at the top of the civil service.
Over the years, Somanathan also acquired the reputation of being a civil servant who could work with leaders of different political parties with equal ease and effectiveness. Not surprisingly, till he joined the finance ministry in December 2019 as expenditure secretary, his career at home swung between working on economic policies for Prime Minister Narendra Modi at the PMO and for Tamil Nadu chief ministers M Karunanidhi and E K Palaniswami.
He joined the Union finance ministry amid a minor turmoil. Within a couple of weeks of the presentation of the Budget for 2019-20 in July, then finance secretary Subhash C Garg was shifted to the power ministry over his reported differences with the finance minister. A new secretarial team in the finance ministry was in the making, and of that Somanathan soon became the central pivot.
When the pandemic broke out, it was Somanathan who played a critical role in pushing the government’s capital-expenditure strategy to overcome the challenges. Coupled with his focus on plugging leakages in expenditure flows and the push for removing off-Budget borrowing to make the government’s fiscal deficit real and more transparent, Somanathan became a strong proponent of fiscal prudence and responsibility.
As the head of the committee to reform the new pension scheme to address concerns from sections of employees and some state governments, he has played a significant role in coming close to a resolution.
As Cabinet secretary, Somanathan will have a slightly different role in the government, even as his status in the Warrant of Precedence goes up from 23rd as finance secretary to 11th along with that of the attorney general of India. Hopefully, a new home secretary will be announced soon to prevent the odd situation of the new Cabinet secretary being junior to the home secretary.
In 2022, Somanathan had co-authored, along with Gulzar Natarajan, a widely acclaimed book on governance — State Capability in India, published by Oxford University Press. The book has several brilliant suggestions on strengthening the civil services framework in the country along with changes in the transfer policy for bureaucrats and steps to make civil servants better policymakers. Expect many of those suggestions to be implemented by the new Cabinet secretary!
AK Bhattacharya @AshokAkaybee is the Editorial Director, Business Standard. Views are personal.