........Prime Minister Manmohan Singh in consultation with Mr Chidambaram will finally pick the next RBI boss. Before, Wednesday's statement from Mr Chidambaram, there was a strong buzz that Dr Subbarao may be offered another extension given that elections are less than a year away and the government would have been comfortable with a man who's been at the helm of affairs for a long time rather than have someone new altogether. Currently, the RBI top job is not really the most enviable assignment to take on with the country's widening current account deficit and a hostile rupee..................
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It is surprising that GOi even at this late hour does not think of pragmatic succession plans for filing top positions like that of RBI Governor.
Reserve Bank of India is one statutory body in the country which has been able to withstand the pangs of succession issues at the top for more than 7 decades of its existence, thanks to the maturity shown by those in charge of governance in Delhi. Recent developments brings to the fore the need to recall this and get a reassurance that whims and fancies of individuals destined to take decisions will not change this image.
In 2011, the timely decision by Centre to give a two-year extension to RBI Governor Dr Subbarao stood apart as a decisive vote for stability at the Central Bank. This ensured continuity of policy perspective at a time when it was needed most and strengthened the RBI to pursue the right course it was following in different areas of its responsibility. A change of guard at that time would have resulted in slowing down of the processes of change in areas like fighting inflation, forex reserves management, financial inclusion and outreach and transparency in policy prescriptions where Dr Subbarao has made perceptible progress.
Recent developments which saw easing out of a Deputy Governor (Subir Gokarn) for no fault of his and compulsions to retain another Deputy Governor for another year calls for a review of the selection and placement procedure at that level. Perhaps the pool from which selection is made and the age profile (raising the upper age limit by 3 to 5 years from the present ‘normal’ at 62 years) need a review. In the circumstances, it would be most appropriate to extend the tenure of Governor Dr Subbarao who is to retire within months, initially by another year at this juncture.
Formulating and implementing succession plans for top government/public sector jobs with professionalism and efficiency in a graceful manner is imperative for allowing the institutions to function with reasonable functional autonomy within the legislative mandates.
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