Who will be the next RBI governor? Gokarn or Panagariya

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The hectic speculation around the appointment of the new RBI governor is heating up. Every meeting between finance minister Arun Jaitley and Prime Minister Narendra Modi is being tracked meticulously as the government keeps everyone guessing.

Top sources in the finance ministry said, “The finance ministry meets the prime minister at least twice every day. So it is difficult to guess if the new governor’s appointment is being discussed.”

The source quoted above said that the race to the Mint Road is now down to two: Subir Gokarn and Arvind Panagariya. The announcement of the new Reserve Bank of India (RBI) governor will be made anytime now, he added.

“The announcement is expected anytime…it is important to end the uncertainty,” the source told Hindustan Times.

Panagariya was an economics professor at the Columbia University when he was appointed as the head of the NITI Aayog. He is an admirer of the “Gujarat model” of development, and his views on the economy are considered similar to that of Modi’s.

Gokarn is currently with Brookings India. He was the executive director on the board of the International Monetary Fund.

Bankers are hoping that the top central bank job goes to Panagariya. “He has been pitching for lower interest rate and he has been pro-growth, it should be good if he takes charge,” a top executive at ICICI Bank said.

The decision on appointment of the RBI governor is taken by the prime minister in consultation with the finance minister. As they scout for a new head for the RBI, Narendra Modi has to balance the demands and choices thrown up by his party along with the economic needs of the hour.

Speculation around the RBI governor Raghuram Rajan’s successor began since his announcement to exit. Names including State Bank of India chairman Arundhati Bhattacharya, RBI deputy governor Urjit Patel, former deputy governors Gokarn and Rakesh Mohan, former economic advisor Kaushik Basu, tax expert Parthasarathi Shome, chief economic adviser Arvind Subramanian and economic affairs secretary Shaktikanta Das, have been doing the rounds.

“The preference is for someone who has international acceptance as an economist and has served the Indian government in some capacity,” sources told HT.

RBI governor Raghuram Rajan recently announced his decision to return to academia when his term ends on September 4.

 

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