Thursday 25 / April / 2024
New Delhi: With Indian central bank Governor Raghuram Rajan heading back to academia after his term ends in September, the search for his replacement has begun.
Finance Minister Arun Jaitley said on Saturday that a successor would be announced shortly. India’s central bank chiefs are appointed by the prime minister in consultation with the finance minister.
Below are potential candidates to succeed Rajan as governor in the world’s fastest growing major economy, according to Ambit Capital and media reports.
Urjit Patel, Deputy Governor, Reserve Bank of India
Urjit Patel, like Rajan, has spent several years overseas and has about 25 years of experience in economic policy making. With a doctorate in economics from Yale University, Patel has been a key architect of reforms at the Reserve Bank of India (RBI), including the establishment of an inflation targeting framework.
A panel headed by Patel, 52, had proposed a shift to consumer-price inflation to anchor monetary policy. As part of this, the government agreed last year to adopt a 4 per cent inflation target with a band of plus or minus two percentage points, and to have a monetary policy committee set interest rates.
Urjit Patel
"Urjit Patel appears to be best placed as he possesses the appropriate skills from a macroeconomics perspective besides holding the promise of independence,” Ambit analysts Ritika Mankar Mukherjee and Sumit Shekhar wrote in a report in April.
Rajan raised borrowing costs after he took over in 2013, citing the Patel Committee report as a road map to ease one of Asia’s highest inflation rates. Patel joined the central bank in 2013 from The Boston Consulting Group, where he served as an adviser. He worked with the International Monetary Fund for five years until 1995, and also served in India’s finance ministry as a consultant in the economic affairs division.
Patel didn’t immediately respond to an e-mail seeking comment.
Arundhati Bhattacharya
Arundhati Bhattacharya, 60, took over as head of India’s largest lender in 2013 and revamped its operations. If appointed, she would be India’s first female central bank governor.
In 2014, Bhattacharya was ranked among the 50 Most Influential people in global finance by Bloomberg Markets magazine. She was also ranked as the fifth-most powerful woman in finance by the Forbes magazine.
Bhattacharya has overseen State Bank’s expansion to about 17,000 branches, 330 million customers across 36 countries. It was one of the only two state-controlled banks among 28 that expanded loans by more than 10 per cent in the year to March 31, data compiled by the finance ministry shows.
She is also credited with ushering in technology in the 200 year-old institution. Bhattacharya has demanded more power for bankers to tackle bad loans, and pushed for the merger of State Bank with five subsidiaries.
After Rajan’s announcement on Saturday, she said: "Dr. Rajan is a person of very high caliber, who has built ably on the reputation of our central bank and given it a very large measure of credibility."
Shaktikanta Das
Shaktikanta Das, 59, is a career bureaucrat with almost four decades of service. His job requires him to closely coordinate with the central bank, and he’s involved with discussions on setting up a new monetary policy committee. As a director on the board of the Reserve Bank of India, he understands how the institution functions.
Prime Minister Narendra Modi initially brought Das into the finance ministry to head revenue department, which was battling perceptions of "tax terrorism.” In that role, Das proposed lowering the corporate tax rate, and led government efforts in curbing black money by negotiating a deal with Switzerland for more disclosure and announcing an amnesty program.
Das has been a key figure in putting together India’s budget, often acting as a crucial link between the finance ministry and other departments. He also actively promotes government initiatives on Twitter, a trait Modi appreciates among his ministers and bureaucrats. Das, due to retire in February 2017, didn’t answer two calls to his mobile phone on Saturday.
Arvind Subramanian
Arvind Subramanian, 57, replaced Rajan as chief economic adviser in the finance ministry in October 2014. The Oxford University-educated economist is a proponent of lower interest rates and has supported an easier budget deficit goal to boost public expenditure.
In his current job, Subramanian gives input on the economy and authors the Economic Survey, an annual report card of the finance ministry. He is also a member of the finance minister’s expert group on the Group of 20. He prepared a report on potential rates for India’s long-delayed goods-and-services tax, which is still stuck in parliament.
Modi’s appointment of Subramanian was seen as a surprise because he was critical of the government’s move to block a World Trade Organisation deal and called some of its budget numbers "implausible.” After taking up the post, Subramanian said it was a "great honor” to serve in a government that has a mandate for "reform and change."
A senior fellow on leave from the Center for Global Development and the Peterson Institute for International Economics, Subramanian has expertise on topics including growth, trade, oil and intellectual property. He has also served as an assistant director in the International Monetary Fund. He declined to comment when contacted on Saturday.
