New Delhi: Appreciating the “good work” by Reserve Bank of India (RBI) Governor Raghuram Rajan, Finance Minister Arun Jaitley on Saturday announced that a successor would be named soon.
There are seven contenders to take the reign of RBI when Rajan’s term ends in September. According to areport by Reuters, Vijay Kelkar, Rakesh Mohan, Ashok Lahiri, Urjit Patel, Arundhati Bhattacharya, Subir Gokarn and Ashok Chawla are in the race to replace Rajan.
Urjit Patel is currently serving as a deputy governor of the RBI and Arundhati Bhattacharya is chair of India’s largest public sector bank, State Bank of India.
After announcement by Rajan that he would not continue at RBI after his term ends on September 4, Jaitley wrote on micro-blogging website Twitter, "Dr Raghuram Rajan has announced his intention to go back to academics at the end of his current assignment."
"The Government appreciates the good work done by him and respects his decision. A decision on his successor would be announced shortly," he added.
In a letter to his colleagues at RBI, Rajan on Saturday said that he will not continue in office and will go back to academia in the United States when his term ends.
Also Read: Raghuram Rajan’s letter to RBI colleagues on second term: Full text
Ruing that his work on containing inflation and cleaning up books of the banks was "yet to be completed", Rajan said in his letter to colleagues at RBI, "While I was open to seeing these developments through, on due reflection, and after consultation with the government, I want to share with you that I will be returning to academia when my term as Governor ends on September 4, 2016."
People across spectrum, including politicians and industrialists, have expressed disappointment over the decision. Industry body Assocham said Mr. Rajan leaving is not a good sign for Indian economy.
“Dr. Raghuram Rajan leaving the RBI at a time when a tumultuous global economy poses several risks to India along with the banks grappling with an unprecedented challenge of mounting non-performing assets is quite unfortunate” Assocham Secretary General D. S. Rawat, said in a statement.
Kiran Mazumdar-Shaw, Chairman and Managing Director of Biocon, R Seshasayee, Chairman of the Board of Directors of Infosys and Infosys founder NR Narayana Murthy are among those who have voiced their disappointment after Rajan’s announcement. Nobel laureate Amartya Sen said India is losing one of the most skillful economic thinkers in the world.
A political battle has also begun with opposition parties attacking the government over the development.
"I am disappointed and profoundly saddened by the decision of Dr Raguram Rajan to leave the RBI on completion of his term on September 4, 2016, but hasten to add that I am not surprised at all," read a statement from Chidambaram, who was the Union Finance Minister when Rajan had been appointed to head the RBI .
"The government had invited this development through a craftily planned campaign of insinuations, baseless allegations and puerile attacks on a distinguished academic and economist," he continued.
"As I had said some time ago, this government did not deserve Dr Rajan. Nevertheless, India is the loser," Chidambaram declared.
“Prime Minister Narendra Modi knows everything. He has no need for experts like Raghuram Rajan,” Congress vice president Rahul Gandhi said on Twitter.
“Thank you Dr Rajan for steering the economy in difficult times. People like you make India great,” he added.
On the other hand, BJP MP Subramanian Swamy, who ran a tirade against Raghuram Rajan, said the Reserve Bank head is a government employee and is not selected on the basis of popular vote.
“Raghuram Rajan is an employee of the Government of India. We don’t select employees on the basis of popular vote,” he said, reacting to Rajan’s decision not to seek a second term.
In a series of letters to Prime Minister Narendra Modi, Swamy had earlier demanded dismissal of Rajan, arguing that he is not “fully mentally Indian” and had been sending confidential and sensitive financial information around the world.
