Coming Wednesday, Finance Minister (FM) Nirmala Sitharaman will present the 2023 Union Budget – the last full Budget ahead of the 2024 Lok Sabha elections.
While India exited 2022 as a relatively bright spot in the global economy, the FM will endeavour to present a Budget that insulates India’s economy against global headwinds and recession in advanced economies, while sticking to the path of fiscal consolidation.
In this, she is being helped by her core team of trusted advisors.
In July 2022, when asked by Business Standard during an interview whether she wished she had the luck some of her predecessors had, Sitharaman’s safe reply was that she was fortunate to have learnt a lot from the late Arun Jaitley.
There is, however, no denying that Jaitley and perhaps even P Chidambaram and Pranab Mukherjee – her three immediate predecessors – faced a much more benign global macroeconomic situation in their time, notwithstanding the 2008 financial crisis and the taper tantrum of 2013.
The country’s first full-time woman FM took charge at North Block when the economy was already slowing down in 2019. Then came two years of a crippling Covid-19 pandemic and a year of disruption in food and commodity supply chains due to the war in Europe. The geopolitical upheaval led to a huge jump in the Centre’s food and fertiliser subsidy outgo. However, tax collections have been very robust.
In her previous Budget, Sitharaman focused on public investment in infrastructure and the delivery of welfare without being overtly populist, keeping an eye on the medium-term fiscal consolidation road map. One can expect more of the same on February 1.
Sitharaman, who studied economics at Jawaharlal Nehru University, has held the commerce and defence portfolios in Narendra Modi’s first tenure. It was during her time as defence minister in 2019 when the 1999 skirmish between India and Pakistan happened.
Sitharaman has been elected to Rajya Sabha from Karnataka.
T V Somanathan
By convention, the seniormost of the five secretaries in the Ministry of Finance is designated the finance secretary. Somanathan holds that charge. He also heads the Department of Expenditure.
Considered one of the most influential bureaucrats in the government, Somanathan holds a PhD in economics and is a 1987 batch officer from the Tamil Nadu cadre.
He worked in the Prime Minister’s Office from April 2015 to August 2017 and is known to have the ears of Modi.
Somanathan is known for his knowledge and clarity on all matters economic. In the last few Budgets, his focus has been on eliminating off-Budget borrowing.
In the current fiscal year, the finance ministry has embarked on a serious plan to cut non-essential expenditure, especially in subsidy and welfare schemes, and one of the underlying themes of the upcoming Budget could be expenditure rationalisation.
A rather publicity-shy bureaucrat, Seth is a 1987 batch Karnataka cadre officer who was the managing director (MD) of Bangalore Metro before being brought in as economic affairs secretary in April 2021. His earlier stint in the central government was also in the finance ministry as joint secretary, Budget.
As the Department of Economic Affairs secretary, he has spearheaded initiatives like India’s first sovereign green bond issuance and the creation of the Infrastructure Finance Secretariat. He is also the secretary in charge of the finance track of the Group of 20 (G20) under India’s Presidency.
The Budget division, which puts together all inputs and prepares the Budget, reports to him and Seth is expected to draft parts of Sitharaman’s Budget speech, along with Somanathan and Chief Economic Advisor (CEA) V Anantha Nageswaran.
Seth’s department is also the nodal division for the capital market, investment, and infrastructure-related policies.
Tuhin Kanta Pandey
Pandey and his Department of Investment and Public Asset Management (DIPAM) have been instrumental in the privatisation of Air India and Neelanchal Ispat Nigam, and the initial public offering of Life Insurance Corporation of India. However, for another year, DIPAM could fall short of the divestment target, which is ~65,000 crore in 2022-23.
In the next fiscal year, Pandey’s priority will be to complete pending transactions like the sale of IDBI Bank and the privatisation of the Shipping Corporation of India, Container Corporation, Bharat Earth Movers, and the Nagarnar Steel Plant of NMDC (formerly National Mineral Development Corporation).
Pandey is a 1987 batch officer from the Punjab cadre.
The juniormost of all the finance ministry secretaries in terms of allotment year, Malhotra is a 1990 batch officer from the Rajasthan cadre. Before taking charge of the Department of Revenue, Malhotra headed the Department of Financial Services. He has also been the chairman and MD of Rural Electrification Corporation and has served in the Ministry of Power.
As revenue secretary, Malhotra will aim at ensuring that tax revenue targets are exceeded, which would be the third year in a row if it happens.
He will help Sitharaman draft Part B of her Budget speech.
A 1989 batch officer from the Haryana cadre, Joshi holds a doctorate in international economics from the University of Geneva. Before being appointed financial services secretary, Joshi was the registrar general and the census commissioner of India.
Even as bank balance sheets have strengthened, Joshi’s work will be to drive the pending privatisation of two state-owned banks and one general insurance company, if the political leadership decides to go ahead and ensure there is a healthy collection of dividends from state-owned financial institutions.
He will also oversee the implementation of those schemes which are implemented by public sector banks.
V Anantha Nageswaran
The CEA has established himself as one of Sitharaman’s trusted advisors and is expected to give key inputs to her speech, apart from headlining the Economic Survey. He is also deeply involved in the finance track of G20.
Nageswaran has brought realism and data-based discourse to the economic narrative coming out of the finance ministry and is well-regarded by fellow economists.
Nageswaran is an MBA from the Indian Institute of Management, Ahmedabad, and holds a doctorate from the Isenberg School of Management, UMass Amherst.
His private sector stints include UBS, Credit Suisse, and Julius Baer.