Chakrabarti was born in 1959 in Jalpaiguri, West Bengal, India. He was educated at City of London School; New College, Oxford (BA in Philosophy, Politics, and Economics); and the University of Sussex (MA in Economics).
Chakrabarti joined the UK's Overseas Development Administration (ODA), the predecessor to the Department for International Development, in 1984 as a senior economic assistant working on macroeconomics issues and UK aid projects. He previously worked in Botswana on an Overseas Development Institute Fellowship. He was seconded by the UK government to the International Monetary Fund and the World Bank in the 1980s. On returning to the ODA in London, he became Private Secretary to the Conservative Lynda Chalker, then Minister of State for Overseas Development based at the Foreign Office. Chakrabarti subsequently became Head of Aid Policy and Resources.
He moved to H.M. Treasury in 1996 before taking a Cabinet Office post responsible for creating the new central Performance and Innovation Unit to support the Prime Minister, Tony Blair, coordinating reviews of long-term issues that cross public sector institutional boundaries. Still in the Cabinet Office, he headed the Economic and Domestic Affairs Secretariat, also maintaining a foot in the then Department of Transport, Local Government and the Regions.
In 2001, returning to the Department for International Development (DfID), the successor body to the ODA, Chakrabarti became DfID Director-General for Regional Development Programmes, managing 1,200 staff in Africa, Asia, Eastern Europe, the Caribbean and Latin America. On 8 December 2009, he gave evidence to The Iraq Inquiry, discussing preparations for the 2003 invasion of Iraq.
From 2007 to 2012, he served as a Permanent Secretary (senior civil servant) at the UK's Ministry of Justice. During that period, he also held office as Clerk of the Crown in Chancery, and, as such, was responsible for the running of the Crown Office, under the directions of the Lord Chancellor. He was appointed on 15 November 2007.
He is married and has one daughter.