The government on Monday appointed Watal, serving as secretary in the ministry of new and renewable energy, as officer on special duty (OSD) in the department of expenditure.
The 1978 batch Indian Administrative Service (IAS) officer from Andhra Pradesh cadre will take over from Gujral when the latter retires as expenditure secretary on November 30.
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Watal will have to do the difficult job of retaining the fiscal deficit at 4.8 per cent of the gross domestic product (GDP), as promised by Finance Minister P Chidambaram, by cutting expenditure without compromising on growth.
His appointment as OSD is in the rank and pay of a secretary, and comes into effect immediately, the government said on Monday, and directed the department of expenditure to seek ex-post-facto approval of the cabinet for creation of the post of OSD for the requisite period.
In July 2011, when Gujral was called to head the revenue department under then finance minister Pranab Mukherjee he was serving as secretary in the ministry of road transport and highways.
At that time, two other secretaries in the finance ministry were from the same batch, Sumit Bose and R Gopalan. Bose was leading the race to be the finance secretary on seniority-cum-merit basis, but when Gujral came, he became the senior-most to be finance secretary on merit.
Chidambaram, after taking charge in August 2012, swapped the portfolios of Bose and Gujral. It was widely believed that Gujral being the revenue and finance secretary was held responsible for approving tax proposals that made investors jittery.
As Expenditure Secretary Gujral helped the finance minister better his fiscal deficit target last year. Fiscal deficit was lowered from projected 5.1% of the GDP to 4.9% as the finance ministry strictly went by the book and did not allow expenditure beyond the specified ceilings in the last quarter.