SC Garg’s early retirement to further delay Jalan Panel report on economic capital framework

New Delhi: Former finance secretary Subhash Chandra Garg’s early retirement after being shunted out of finance ministry to power ministry may further delay the Jalan Panel report on economic capital framework (ECF), that had to decide the quantum of reserves that should be transferred from RBI to the govt.

The Bimal Jalan led panel on ECF might have to meet again since the final report hasn’t yet been signed, the official said.

“The panel may need to take finance ministry’s view again on RBI surplus transfer since SC Garg was dissenting with the initial report,” the official said.

Sources told ET Now that Jalan panel could meet with the new economic affairs secretary in the next meeting to finalise the report.

“The panel might remove the dissent note of Subhash Chandra Garg from the report. The committee will attempt to put forth unanimous view of the panel,” the official said.

The committee on ECF was set up by the central bank in December 2018 and was expected to submit its report within 90 days from the date of its first meeting. Garg, Bimal Jalan, former RBI Deputy Governor Rakesh Mohan, directors of RBI’s central board Bharat Doshi and Sudhir Makand, and RBI Deputy Governor NS Vishwanathan are part of the panel.

The panel was formed at a time when the government and the central bank were involved in differences of opinion on the issue of RBI’s surplus transfer to the government.

The controversy over the transfer of surplus reserves started when it was reported that the government was seeking Rs 3.6 lakh crore from RBI. The government then said that it was only discussing a proposal to fix an appropriate “economic” capital framework for the central bank.

Subhash Garg wanted a higher fund transfer than the majority view of the panel.