Former Finance Secretary Subhash Chandra Garg on Saturday said that his differences with Finance Minister Nirmala Sitharaman were behind his abrupt exit from the government last year.
In a blog post, Garg said that Sitharaman had insisted on his transfer from the north block a month after she took over as the finance minister.
“She, for reasons not very clearly known to me, came with some pre-conceived notions about me. She did not seem to have confidence in me. She was not quite comfortable working with me as well. Serious difference also developed on some key issues like economic capital framework of RBI, package for dealing with problems of non-banks, resolution of non-banks, partial credit guarantee scheme, capitalisation of non-banks like IIFCL and other financial entities and the like," he said in the post.
“Very soon, not only had our personal relationship soured, but the official working relationship also become quite unproductive (sic)," he added.
Garg is believed to have played a crucial role in the government by asking for the Reserve Bank of India’s surplus cash reserves, which led to the resignation of then-governor Urjit Patel in December 2018.
Opening up after a year of quitting, Garg has also claimed that at the time presenting the Budget for 2019-20, the government knew that the economy was slowing down and that the capital investment was falling.
"The financial system, more significantly, the public sector banks, which still have the dominant share of credit, were in a lot of bother," he said. It still declared an ambitious goal of attaining a $10-trillion economy target by the early 2030s, Garg added.
Talking further about the 2019-20 Budget, Garg said that it was a recital of great work done in the previous five years.
"It did not, however, have a single major economic reform. Some proposals for reforming sectoral foreign direct investment limits, issuing foreign currency sovereign bonds, selling share below the 51% limit in case of public sector, which I could push through, were not good enough to alter the course of economic system materially." he wrote.
“I was getting quite disappointed. I sensed that the opportunity to work on big and bold economic reform agenda was slipping away. If there was no good opportunity to work on reform and building of $10 trillion dollar economy, there was no great fun in working in the government. This was the first major reason of my contemplating to leave the Government,” he added.