Narendra Modi, upon becoming Prime Minister in 2014, engaged in covert negotiations with the Finance Commission to drastically reduce funds allocated to Indian states. However, the independent commission resisted, forcing Modi to back down, according to new revelations.
This firm stance led the Modi government to hurriedly alter its first full budget within 48 hours, cutting welfare programs. Despite this, Modi deceptively claimed in Parliament to welcome the Finance Commission’s recommendations.
BVR Subrahmanyam, CEO of the government think-tank NITI Aayog, who served as a liaison between Modi and the Finance Commission chairman, disclosed this financial wrangling behind the federal budget creation. This marks the first time a high-ranking official under Modi has publicly admitted attempts to squeeze state finances, a concern repeatedly raised by states.
Subrahmanyam, speaking at a seminar, further criticized the budget’s opacity. He highlighted the danger of hidden truths, comparing the need for transparency to US short-seller Hindenburg Research’s exposure of Adani Group’s problematic accounting practices. This transparency, he suggested, could reveal the true state of the government’s finances, a particularly sensitive issue due to the Adani conglomerate’s alleged closeness to the Modi government.