If the capitals grapevine is to be believed, Planning Commission member secretary, Arjun Sengupta, has emerged as the strongest contender for the RBI governors job. The present governor, Dr C Rangarajan, is due to complete his extended tenure in a few weeks. The government will soon have to decide on either choosing his successor or retaining him in the job for some more time.
The tenure of the present cabinet secretary, T S R Subramaniam, is also due to end by December. The government has not made up its mind on who should succeed him, although names of several senior bureaucrats are being talked about as strong contenders. Like Dr Rangarajan, Mr Subramaniam is also on an extended tenure and another extension for both seems unlikely.
It is unlikely also because the UF government under Inder Kumar Gujral will be tempted to go ahead with fresh appointments for two specific reasons. One, it will not like to lose the opportunity and the power of deciding on the appointment of two key functionaries -- one overseeing the countrys financial sector and the other supervising the entire government administration. Two, the Gujral government has shown to everybody that when it comes to taking key decisions, it can hardly ward off pressure from different quarters within the UF partners.
Already, the government is under tremendous pressure from the various UF constituents to appoint their favoured persons as the next RBI governor. Left parties are said to have backed the candidature of a very senior bureaucrat. This has upset the calculations of the finance ministry, which had zeroed in on a candidate of its own choice. And further complicating the selection process, the Prime Ministers Office (PMO) has indicated to the finance ministry that it retains the right to choose the next RBI governor, contrary to the widely-held belief that it is North Block which nominates candidates for RBI governorship.
For the cabinet secretarys job also, similar jockeying has begun. A section within the UF is seriously lobbying for a senior IAS officer belonging to a backward caste -- the argument being that the country must have a cabinet secretary from a backward community in its 50th year of independence. There is also strong pressure on the government to widen its choice and take a look at those senior officers who were sent on a foreign assignment to represent India on the board of international institutions.
These are disturbing developments. In the recent past, the Gujral government has done little to gain anybodys confidence in its ability to handle key secretarial appointments. In the aftermath of the governments battle with Japanese car maker, Suzuki, it decided to shift heavy industry secretary, Probir Sengupta, to the petroleum ministry. Mr Sengupta, at that time, was spearheading the governments battle with Suzuki in his additional capacity as chairman of Maruti Udyog Limited.
Removing Mr Sengupta from the department of heavy industry could have been construed only in one way: the government wanted to bury the hatchet with Suzuki and so decided to shift Mr Sengupta. But as it turned out, that was not the intention of the government. Mr Sengupta was not relieved from the heavy industry department by his minister, Murasoli Maran, for well over a fortnight after the announcement was made. And even when he was, Mr Sengupta was asked to continue as chairman of Maruti Udyog Limited. What is more, Mr Sengupta even now spends only half his day in the petroleum ministry. The other half is spent in the industry ministry. Similarly, the shifting of Vijay L Kelkar from the petroleum ministry to the newly-created Tariff Commission as its chairman could have waited.
What then was the hurry in effecting these transfers? Was the government under any pressure from any quarter? There are no official explanations. The Gujral government has either been simply inept in handling key appointments of its secretaries, or seems to have acted under pressure.
Once again, the government is under tremendous pressure from different quarters on the crucial issue of appointing successors of Dr Rangarajan in the RBI and Mr Subramaniam in the cabinet secretariat. The prime minister must have realised by now that given the current political equations, he can do very little to thwart such pressures. He can only make minor adjustments here and there, as his flexibility on such issues is severely limited.
Mr Gujral, of course, has an easy way out. He may well recall what former prime minister, P V Narasimha Rao, did in the first year of his tenure, when he too was under severe pressure from various constituents providing support to his government. Mr Rao did not make any major changes in the key government posts, apart from appointing A N Varma as his principal secretary. For instance, Mr Rao retained both Naresh Chandra and S Venkitaramanan, who were appointed as cabinet secretary and RBI governor, respectively, by the Chandra Shekhar government. Why did Mr Rao decide to continue with the same team? He must also have had several names who could replace Mr Chandra and Mr Venkitaramanan. But Mr Rao must have felt that changing them would instead rake up fresh controversies.
An obvious question is: what happens if Mr Gujral also decides to give both Dr Rangarajan and Mr Subramaniam further extensions? The truth is that nobody will be affected except those who were hoping to succeed them. On the contrary, Dr Rangarajan will be in a better position to provide continuity in the central banks policies and approach in tackling the new challenges in the financial sector. And another one-year tenure for Mr Subramaniam can also provide continuity in the central governments administration at a time when political uncertainty is increasing with prospects of mid-term elections looming large.
