Chief Economic Advisor post to remain vacant for rest of Modi govt's term: Report

The office of Chief Economic Advisor is likely to remain vacant for the remainder of Modi government's term after Arvind Subramanian steps down in early September later this year. The incumbent government might not appoint a new CEA in the last year in power, according to a Livemint report. Earlier this week, Subramanian announced his plans to resign before his term ends due to "pressing family commitments". He will move back to the United States to resume research and writing.

The Narendra Modi government, which will complete its term in April 2019, will present a vote-on-account instead of a full Budget in February ahead of the upcoming 2019 General Elections. Considering this, the present government does not have to present an Economic Survey in the last year of its tenure. The responsibility of presenting an Economic Survey and a regular Budget will fall with the government that will be elected next year.

"So, in such a scenario, government is unlikely to appoint a chief economic adviser for the rest of its term," an anonymous finance ministry official was quoted in the Livemint report. There is also a chance that no noted economist will agree to work with the Modi government for the few months left of its term.

Sanjeev Sanyal, the principal economic advisor in the finance ministry, will reportedly take the reins of the economic division after Subramanian, till a new government assumes power.

Something similar happened when Raghuram Rajan, Subramanian's successor left the office of chief economic advisor after his appointment as the Governor of the Reserve Bank of India in September 2013. Since the then UPA government decided not to look for Rajan's successor, the post remained vacant till Subramanian was appointed by the Modi government in October 2014. He was appointed for a three-year term, and was given an extension last year.

Earlier this week, Finance Minister Arun Jaitley broke the news of Subramanian planning to leave his CEA job and return to the US. "His reasons were personal but extremely important for him. He left me with no option but to agree with him," Jaitley wrote in the post.

In a statement later, Subramanian said that the CEA job was the best he has ever had, but he had to leave due to very compelling reasons.