Inside Raisina Hill: Weekly Wrap From The Power Corridor-IV

As one walks down the Hill along the Rajpath, now renamed Kartavya Path, come other edifices — Rail Bhavan, Krishi Bhavan, and Shashtri Bhavan on one side and Sena Bhavan, Udyog Bhavan, and Vanijya Bhavan on the other. The bureaucrats who adorn the offices in these buildings decide on India's economic, social, and industrial policies. There are many tales to be told from the corridors of these grandiose buildings. We let you in on some of them here in this week's edition of "Inside Raisina Hill".

Potential Consultants Flock To Delhi Secretariat

A fresh new government in the state of the National Capital Region of Delhi ushered in a move last week that scrapped the previous engagement of dozens of consultants with the previous government.

Suddenly, there is no dearth of consultancy vacancies at the Delhi Secretariat. Net result: Several former bureaucrats are making a beeline to fill that vacuum. The earlier government had created that space for external consultants with fat pay cheques.

However, there is a thinking in the corridors of power that the government should not go around creating a sinecure for out-of-work babus. Rather, DANIC or Delhi-Andamans Nicobar Islands Civil Service serving officers, who have not got choice placements but are capable, maybe brought in as Officer on Special Duty to do the job that some of these consultants did.

Plus, of course, there are powerful consultancy firms who always manage to get a toehold in any government setup anywhere in the world.

So, hectic parleys are taking place involving senior bureaucrats and the who’s who of the new Delhi state government. A race is on to seek appointments for the consultant, or should we say OSD space, which is right now seeing a problem of plenty.

Gauba’s NITI Aayog Placement Driven By PM Modi’s Desire For Experienced Hands

The re-induction of former Union Cabinet Secretary Rajiv Gauba into the policymaking space, as a full-time member of the NITI Aayog, generated reactions galore everywhere. Was this his post-retirement sinecure? Or was it a stepping stone to greater glory — maybe a Governorship or a cabinet berth at a later date?

Many in the bureaucratic circles see the current appointment as a reward for his proven ability to lead and steer major innovative policy decisions in his various stints with the current central government. But they also feel this is merely the start, “poori picture abhi baki hain (the full picture is yet to be revealed).”

A 1982-batch IAS officer of Jharkhand cadre, who is also a senior serving bureaucrat and a former close associate of Gauba, on condition of anonymity, said that it is an open secret: He played a critical role in steering major policy, including India’s COVID-19 response and economic recovery strategies.

Induction in NITI Aayog as a full-time member now marks a major metamorphosis — from a distinguished career bureaucrat to playing a key role in India’s top policy think tank. The officer also noted that he became one of the longest serving Cabinet Secretaries because of his ability to deliver.

Gauba was appointed as the Cabinet Secretary in August 2019 until his retirement in August 2024. During his tenure at the top, he was given two back-to-back extensions. His appointment in the NITI Aayog is also seen as PM Modi’s intended push to have experienced hands in policymaking, who could shape long-term national strategies.

The PM is the chairman of the NITI Aayog, which plays a pivotal role in economic planning and policy implementation, and coordination with state governments. In 2014, the erstwhile Planning Commission was replaced with NITI Aayog.

IRDAI Cautiously Gears Up For 100% FDI In Insurance

Finance Minister Nirmala Sitharaman proposed in the Union Budget to increase the foreign direct investment (FDI) limit in the insurance sector from the existing 74 per cent to 100 per cent.

In the aftermath, the Insurance Regulatory and Development Authority of India (IRDAI) and other stakeholders are aggressively working to table the Insurance Amendment Bill.

According to reliable sources, drafting of the key regulatory changes is almost ready. The Bill is expected to be presented in the next session of Parliament.   

“In case it cannot be taken up in the monsoon session, it will definitely come up in the winter session. It is a sensitive area and needs careful handling,” a person familiar with the development said.

While the government is keen to enhance the FDI limit, there is a caveat. The 100 per cent FDI limit will be available to companies which are investing the entire premium in India, even as the finance minister promised to simplify guidelines.

A senior executive of a private insurance major said that the capital requirement is increasing with changing healthcare dynamics as well as the rising costs.

But the passage of the Bill may not be seamless. The Opposition parties are likely to put up a stiff resistance. The Samajwadi Party led by Akhilesh Yadav has already questioned the government’s move of allowing foreign entities to take control of this sensitive sector.

The regulatory changes will have to be carefully thought through, as this has been a sensitive sector. The Left parties, which provided outside support to the Manmohan Singh-led government, had vehemently opposed former Finance Minister P Chidambaram’s move to even raise the FDI limit from 26 per cent to 49 per cent.

“The insurance sector has always been a sensitive area, therefore, we will have to carefully inject the required reforms,” one of the sources said.

McKinsey, in its report, said that with a gross written premium (GWP) exceeding US$ 130 billion and an 11 per cent CAGR from fiscal year 2020 to fiscal year 2023, the insurance sector has made significant progress, outpacing “some Asian peers in terms of premium growth.”

However, what is concerning is that “the industry’s penetration rate slipped from 4.2 per cent in 2022 to 4.0 per cent in 2023, indicating that its progress has not been on par with the country’s economic growth.”

Trade And Commerce Mandarins Having Sleepless Nights

Even before his inauguration, US President Donald Trump started targeting India, calling it things like “tariff king”. Initial threats have now transformed into reality, as American reciprocal tariffs are about to take effect after April 2.

Informal discussion, dashing to Washington, and hectic adjustments in tariff policies — everything is happening for many days now. All heightened activities are centred around the Ministry of Commerce of the Government of India. Formal negotiations between the two countries have already started in New Delhi, and will continue over the weekend.

The American government’s motive is very clear — a new set of tariff adjustments must be made from the Indian side after due agreement with their US counterparts. So, Commerce and Foreign Ministries officials are constantly burning midnight oil, as American demands expand by the day.

Crack negotiation teams from India’s Commerce Ministry are in constant touch with the US Trade Representative (USTR) officials — discussing strategies, potential adjustments, and the granular details of trade relations.

For the last several weeks, these meetings have been a permanent fixture of Indian ministries. The frenzy has now caught up Indian economy in multiple sectors. Other important ministries, including Defence, MeitY (Ministry of Electronics and Information Technology), Consumer Affairs, Agriculture, Mines, Steel, HMI (Heavy Machinery Industry), Labour, and Science & Technology, are now deeply involved in internal consultations.

The final contours of Indian tariff adjustments will have a deep impact across various industries and sectors. That’s why coordination between all ministries involved will be extremely crucial. Now, the moment of truth has arrived. Next week, on April 2, India will be keenly watching the announcements of the Trump Administration.

The presence of the USTR officials in Delhi will pump in positive hope, but the scenario will definitely continue to unfold. No prizes for guessing, more meetings and consultations will follow in the coming days.

Delhi Legislature Wants State Bureaucracy To Up The Game

During the previous government of the Delhi state, there were visible breaks in communication channels between the officials of the state bureaucracy and the legislature.

Looks like that inertia is continuing even after the new government has taken over. In a few instances, the status quo remains. Though the government has changed, the system remains the same. Here too, the tussle has turned into one between the legislators and ministers versus the state bureaucrats.

However, the current ruling party understands that it’s time to change the system and deliver now.

The Speaker of the state legislature has brought this to the notice of the Chief Secretary of Delhi. Strong messages to sensitise the officials of different administrative services, including the Delhi Police and the Delhi Development Authority, have been conveyed.

In the end, a standing instruction was issued by the Speaker to the officials, he also wants to know about the actions taken in due course.

And voila! In a couple of days, the Additional Chief Secretary has issued a stern notice to all officials, asking them to adhere to the instructions in both letter and spirit.

Since it is still early days for the new government, the mandarins in state bureaucratic corridors are taking all these in their stride. There is hope that the system would improve and change decisively.

But the final push for the systemic change may have to come ultimately from the Raisina Hill, the seat of the central government.

Contributed by Pawan Kumar, Mahua Sengupta Venkatesh & Jayanta Roy Chowdhury; anchored by Abhijit Mukhopadhyay