Close on the heels of the union cabinet rejig, there was a reshuffle in three crucial ministerial committees. These committees which deal with security, politics and economic affairs are also responsible for allotting government bungalows in Delhi.
The economy is under heavy pressure. Gross Domestic Product is down. Inflation is up. Job opportunities have shrunk. It is in this context that Prime Minister Narendra Modi revamped the ministerial committees and included more ministers in the committee on economic affairs.
The ministerial committee on economic affairs is empowered to decide matters such as fixing support price for rice and wheat, giving permission for export and import, allocating funds for projects that cost over Rs 1,000 crore, and signing economic pacts with foreign countries. Until 10 years ago, this committee could include up to eight members; now the figure has gone up to 12. This time, Defence Minister Nirmala Sitharaman has found a place in the committee. The defence minister is usually included only in the committee for defence and the committee for political affairs.
Nirmala Sitharaman was included in the committee on economic affairs in the context of possible huge investments in the defence sector by domestic and foreign companies. Besides, she had earlier represented the departments of commerce and industry on the economic affairs committee. The committee on economic affairs, presided over by Prime Minister Narendra Modi, includes Finance Minister Arun Jaitley, Commerce and Industry Minister Suresh Prabhu, Roads and Transportation Minister Nitin Gadkari, Railway Minister Piyush Goel, Petroleum Minister Dharmendra Pradhan, Aviation Minister Gajapathi Raju, Agriculture Minister Radha Mohan Singh, Energy Minister R.K. Singh, Law and IT Minister Ravi Shankar Prasad, and Telecommunications Minister Manoj Sinha.
During previous governments, there were serious differences in the economic affairs committee between the ministry of finance and the ministry of commerce regarding policies. Former commerce and industry ministers Murasoli Maran (in the A.B. Vajpayee-led government) as well as Kamal Nath and Anand Sharma (both in the Manmohan Singh-led government) had argued in favour of industrial exports and reduction in tax and for other concessions. Former finance ministers Yashwant Sinha, P. Chidambaram and Pranab Mukherjee were pro-taxation. These disputes were settled through the intervention of Vajpayee or Manmohan Singh.
However, the situation is different in the NDA government. While Kamal Nath was tough while arguing for his case with Chidambaram, Sitharaman is soft towards the powerful Finance Minister Arun Jaitley. During Manmohan Singh’s government, the joke doing the rounds was that the cabinets of the offices of Singh and of Chidambaram were full of letters sent by Kamal Nath.
On the contrary, during this government, Jaitley asks Nirmala Sitharaman to come to his office along with officials for talks. At the talks, Jaitley would announce his decision. There is no occasion for Modi to intervene to settle disputes between the two strong ministries. Interestingly, Pranab Mukherjee, Chidambaram and Jaitley were once in charge of the Ministry of Commerce. In the Narasimha Rao government, Chidambaram was commerce minister and Manmohan Singh was finance minister.
Suresh Prabhu, the new minister for commerce and industry, is more experienced than Sitharaman. At the same time, Prabhu is not as stubborn as Murasoli Maran or Kamal Nath. The Ministry of Commerce is a very powerful one. It has to hold talks with mighty economies of the world such as the United States, European Union, Japan, China and Russia. Moreover, Suresh Prabhu has to hold discussions with industrialists, exporters and bankers in his own city of Mumbai. Post demonetisation, there has been a stalemate in the nation’s industrial sector. Jaitley is under pressure to carry on with the present taxation rates and also to strengthen tax collection.
