Who will replace Raghuram Rajan, as Governor of Reserve Bank of India?

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Raghuram Rajan, the Governor of Reserve Bank of India

After a series of tirades launched by Dr Subramanian Swamy, BJP Rajya Sabha (Upper House) member recently against him, Raghuram Rajan, the Governor of Reserve Bank of India decided not to seek a second term in office.
 
Dr Rajan will hang up his boots on September 4 2016 in what some called a Rexit (“Rajan exit”, which sounds a bit like the famous recent Brexit). He had assumed charge as the 23rd Governor of the Reserve Bank of India on September 4, 2013.
 
Who is Raghuram Rajan? Prior to this, he was the Chief Economic Advisor, Ministry of Finance, Government of India and the Eric J. Gleacher Distinguished Service Professor of Finance at the University of Chicago’s Booth School.
Between 2003 and 2006, Dr. Rajan was the Chief Economist and Director of Research at the International Monetary Fund (IMF).

His research interests are in banking, corporate finance, and economic development, especially the role finance plays in it. He has co-authored Saving Capitalism from the Capitalists, with Luigi Zingales in 2003. He then wrote Fault Lines: How Hidden Fractures Still Threaten the World Economy, for which he was awarded the Financial Times-Goldman Sachs prize for best business book in 2010. He is also praised for his warnings back in 2005 about the financial system stability before the 2008 financial crisis started.

The Controversy

In a series of letters to Indian Prime Minister Narendra Modi, Swamy had demanded sacking of Rajan, arguing that he is not “fully mentally Indian” and had been sending confidential and sensitive financial information around the world.
Refusing to join issues with Dr Swamy, the RBI governor has decided to go back to the academics.

Who will be the next head of the RBI?

With this Rexit, the question is who will be next India central banker?

More than a dozen names are making the rounds in New Delhi, the national capital, and the announcement will be made in August.

Here is a long list of probables’ to replace Rajan.

First and a strong contender is Anundhati Bhattacharya, 60, the Chairperson and Managing Director of State Bank of India.
Merit: If she is made the RBI governor, she would be the first woman RBI governor. A stern administrator.
Demerit: Not handled anything outside banking.

Second, is K V Kamath, 68, President of the New Development Bank, the bank of the BRICS (Brazil, Russia, India, China, South Africa)grouping.

Merit: Began his career in ICICI Bank in 1971 and was its chairman. India’s most respected banker.

Demerit: Already heading a global banking institution.

Third, is Rakesh Mohan, 68, economist.

Merits: Two terms as RBI deputy governor, Secretary in Department of Economic Affairs, Executive Director at IMF.

Demerits: Age may play against him.

Fourth, is Subir Gokran, 56, Executive Director IMF.
Merits: One of the youngest Deputy Governors in RBI, chief economist at rating agency Standard & Poor Asia Pacific.
Demerits: Keeps a low profile.

Fifth, is Urjit Patel 52, Deputy Governor RBI.
Merit: Reappointed as RBI Deputy Governor in January.
Demerit: Considered close to Dr Raghuram Rajan, he may be targeted for his proposal on adopting the cost price index as benchmark instead of Wholesale Price Index.

Sixth, is Arvind Subramanian, 57, the current Chief Economic Advisor (CEA) to the Government of India.
Merit: Economist, Succeeded Rajan as CEA.
Demerit: Does not enjoy a big reputation like his predecessors. Moreover, Dr Swamy has targeted him as well, gunning for his removal.

Seventh, is Dr Kaushik Basu, 65, senior vice-president and chief economist at the World Bank.
Merit: served as chief economic advisor to the Government of India from 2009 to 2012.
Demerit: Worked closely with former Prime Minister Dr Manmohan Singh, and ex-Finance Minister P Chidambaram.

Eighth, is Dr Shaktikanta Das, 59, Indian Administrative Service officer from the Tamil Nadu cadre.
Merit: Secretary, department of economic affairs, at the finance ministry.
Demerit: Closely working with Finance Minister Arun Jaitley.

Ninth, is Vijay L Kelkar, 74, a well known economist.
Merit: Known for his role in economic reforms.
Demerit: Age may not be on his side.

Tenth, is Vinod Rai, 68, head of Banks Board Bureau.
Merit: Former Comptroller and Auditor General (CAG) of India, who flagged the 2G scam, currently heads the newly constituted Banks Board Bureau.
Demerit: Experts believe there could be issues with him heading the RBI after heading the CAG.

Eleventh is Dr Arvind Panagaria, 63, head of National Institution for Transforming India, a Government of India policy think-tank established by the Narendra Modi government to replace the Planning Commission.
Merit: Well known economist.
Demerit: Closely works with Finance Minister Arun Jaitley.

Twelfth is Dr Parthasarathy Shome, 65, tax expert.
Merit: He headed the Tax Administration Reforms Commission. A former economics professor at American University, he has also worked at the IMF, where he has been chief of tax policy among other positions.
Demerit: Considered close to Arun Jaitley.

Besides other  well known names that are making the round include Ashok Chawla, 65, chair of the National Stock Exchange, UK Sinha, 64, Chairman Securities Exchange Board of India and Ashok Lahiri, 64, Former Chief Economic Adviser.