Arvind Subramanian emerges as front-runner as Rajan’s Successor

With Raghuram Rajan not seeking a second term, the hunt for his successor has started, and the forerunner in this race is the Oxfordeducated Arvind Subramanian from a list of five candidates who the government is considering for this post according to a Bloomberg News survey.

Seven of 13 economists gave their vote for Arvind Subramanian, who is presently the chief economic adviser to the finance ministry. None of the remaining candidates received more than two votes.

Arvind has a more dovish reputation, and he does not have much faith in fiscal orthodoxy. His arrival will mean a dramatic shift from his predecessor’s policy that advocated a consumer-price inflation target and has warned against cutting interest rates too quickly. Rajan had announced on Saturday that he will leave the post of RBI when his term expires in September. Corporate India was firmly behind him and was clamoring to give him an extension. However, a prominent ally of BJP attacked his policy of keeping interest rates too high.

Other candidates who are in the race for the RBI Governor’s post include serving assistant Governors of RBI Rakesh Mohan, Subir Gokarn and Urjit Pate, and Economic Affairs Secretary Shaktikanta Das.Head of the government economic advisory body, Arvind Panagariya, and SBI Chairman Arundhati Bhattacharya is also in the race.

Mr. Subramanian is known as a tough taskmaster and gives his inputs on the economy and also authors the Economic Survey which is a report card of the finance ministry. In the latest edition, he calls for an easing of monetary policy to spur economic growth arguing that low oil prices will keep the costs of such measures flat.

Like his predecessor Arvind has held many overseas posts which include stints with the IMF and in recent times as the fellow with Peterson Institute for International Economics. He also taught economics at Harvard University’s Kennedy School of Government and Johns Hopkins’ School of Advanced International Studies.



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