Prime Minister’s Office: PMO told Subhash Garg about transfer before he made VRS request


NEW DELHI: Former finance secretary Subhash Garg, who has now been shifted to the power ministry, was called in to the Prime Minister’s Office on July 18 and informed about the transfer, as a matter of courtesy, before being formally moved out of North Block, ET has reliably learnt.

Those familiar with the details told ET that in the meeting, which also dealt with issues relating to the finance ministry, he was offered a choice in posting. He is believed to have briefly mentioned he might contemplate voluntary retirement.

According to sources, he was requested not to take any hasty decision as he could contribute significantly in another ministry or even in another statutory organisation.


Garg was subsequently appointed power secretary on July 24. The formal letter from him seeking VRS was received by the Department of Personnel & Training (DoPT) on July 25. Interestingly, sources added, it was dated July 24.

Government sources said since he waited until the transfer orders were out, it appears his decision to seek VRS was a consequence of being shifted out of the finance ministry. Garg on Friday sought to delink his transfer order from his decision to take VRS by saying that the latter was discussed with the PMO on July 18. “The proposal to take VRS was discussed with the PMO on July 18 much before the orders came. It has no connection with the orders,” he claimed.

As it turns out, sources said, the July 18 meeting was a detailed deliberation on issues arising from leadership problems in the finance ministry. Primary among them was the renewed conflict with the Reserve Bank of India on the Bimal Jalan panel committee’s recommendations.

Garg had disagreed with the panel’s suggestions and was refusing to sign on to them. He wanted to submit a strong dissent note. The conflict had dragged on and, according the sources, the expectation was that Garg would find a resolution from North Block. But the feedback from the RBI was that the finance secretary was, in reality, the principal hurdle.

It is learnt that Garg’s relationship with RBI Governor Shaktikanta Das had increasingly become strained, which was not helping matters. Besides this, sources said, a conflict was also beginning to fester with the Securities and Exchange Board of India. It is also believed that the top echelons of the government had received reports of Garg developing serious differences with his junior officers.

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