The Union Budget team faces the need for faster fiscal consolidation over the medium term
Prime Minister Narendra Modi’s administration will, on February 1, 2023, present its last full Union Budget before the 2024 General Elections. The Budget will come amid a raft of glad tidings domestically — India is the fastest-growing G20 economy, inflation has come off, and the Reserve Bank of India (RBI) is widely expected to call a pause on interest rate hikes.
However, the global economic outlook remains dark, with the West and China slowing, and geopolitical uncertainties persisting into 2023. This may hurt investor confidence and worsen India’s external balance of trade.
Finance Minister Nirmala Sitharaman and her number crunchers in North Block, who have had to navigate the stormy COVID-19 pandemic years, will yet again need to tread a fine line, needing to choose between stimulating growth and containing inflation and external risks in the year before the general election.
Here is the team that is preparing Budget 2023-24:
Nirmala Sitharaman, who will be presenting her fourth Union Budget on February 1, has helmed the Finance Ministry during the last two tumulus years, delivering several mini-budgets during the worst of the pandemic, offering key relief and reform measures.
As a former defence and trade minister, Sitharaman is equipped to tap opportunities in a world that is seeking to shift supply chain dependency away from China, with whom India has seen multiple border face-offs in recent years.
The minister, who studied economics at Jawaharlal Nehru University, cleaned up the government’s finances in recent years but now faces the challenge of lowering the fiscal deficit and debt burden sustainably while ensuring that economic recovery gets the required boost.
The finance secretary, who looks at the expenditure department, is a 1987-batch IAS officer from the Tamil Nadu cadre. Previously a joint secretary in the Ministry of Corporate Affairs (MoCA) and with the Prime Minister’s Office (PMO) from 2015 to 2017, Somanathan is popular among his colleagues.
Under his watch, the finance ministry has boosted its capital expenditure to a record high and innovated on ways to help boost capex at the states’ level.
Somanathan, who holds a doctorate in Economics, is also a qualified chartered accountant (CA), cost accountant and company secretary. The official has published over 80 papers and articles in journals and newspapers on economics, finance and public policy, and is the author of two books and chapters in several others.
As the Secretary in charge of the Department of Economic Affairs, Seth is a key point person for the Budget. The Budget Division, which puts together all inputs and finalises the financial statement, is under his purview.
A 1987-batch Karnataka-cadre IAS officer, Seth also has the additional responsibility of co-chairing the G20 central bank and finance minister’s meetings into next year.
The soft-spoken Seth is a mechanical engineer and a management post-graduate.
As Secretary of the Department of Investment and Public Asset Management (DIPAM), Pandey has sought to temper expectations on the government’s disinvestments next fiscal year. Remember, in recent years, the government has repeatedly revised downwards its planned disinvestment targets because of the COVID-19 pandemic and as several planned sales took longer than expected or never came to be.
Still, the 1987-batch IAS officer from the Odisha cadre gets credit for completing the long-pending sale of national carrier Air India and for listing national insurer the Life Insurance Corporation of India (LIC).
Secretary Sanjay Malhotra, a 1990-batch IAS officer of the Rajasthan cadre, was recently shifted to the Revenue Department from the Department of Financial Services.
Among his key challenges for the Budget would be to ensure that the projections are not wide off the mark — the finance ministry has, in the past, faced flak for overly optimistic or conservative revenue expectations.
Malhotra, who has, in the past, worked as chairman and managing director of state-run REC, will benefit from the recent buoyancy in tax collections, but would have to negotiate tricky terrain when it comes to states’ expectations, especially on the Goods and Services Tax (GST) compensation front.
The new face in the highest echelons of the finance ministry, Joshi was appointed Secretary of the Department of Financial Services on October 19 to fill the vacancy created by Sanjay Malhotra replacing Tarun Bajaj as the revenue secretary following the latter’s retirement.
Before taking charge as the financial services secretary, Joshi was the registrar general and census commissioner in the Ministry of Home Affairs and also served as CEO of the Gurugram Metropolitan Development Authority. Joshi, however, is well versed with the inner workings of North Block, having been a joint secretary in the Department of Expenditure from November 2014 to April 2017.
A 1989-batch IAS officer of the Haryana cadre, Joshi has a PhD and MA in International Economics from the Geneva Graduate Institute. Before that, he earned a bachelor’s degree in mechanical engineering from the Indian Institute of Technology, Roorkee, where he was also part of the table tennis team.
Nageswaran was named chief economic adviser (CEA) days before the Budget for 2022-23 was presented. As such, with a full-year on the job, Nageswaran will not only be a key player in the making of the Budget for 2023-24, but will also spearhead the drafting of the Economic Survey for 2022-23, which will be tabled in Parliament the day before the Budget is presented.
Nageswaran has a PhD in Finance from the University of Massachusetts Amherst, where his dissertation was on the behaviour of exchange rates, and an MBA from the Indian Institute of Management (IIM), Ahmedabad.
An author of four books, Nageswaran served as a part-time member on the Economic Advisory Council to the Prime Minister from 2019 to 2021. He has also taught at business schools and management institutes in India and Singapore, and spent 17 years in the corporate sector working with the likes of UBS, Credit Suisse and Julius Baer.
