We are familiar with Raghuram Rajan, the chief economic advisor to Finance Minister P Chidambaram , his exposure to international economic problems, his academic credentials and track record which makes him eminently suitable to be GOV.What is the track record of Arvind Mayaram, Secretary, Department of Economic Affairs (DEA). All his life stayed in Rajasthan working in districts, administrative divisions etc.For a short tenure he came to MoF.How does he compare himself with GOVs of Central Banks of advanced countries.Put under the lens his expertise in Monetary Policy, Risk Management,Bank Supervisory expertise, role in implementing Basel Committee recommendations on the website and let the experts choose the next GOV. Why can't any RBI Dy GOV can become a GOV who has deep Central Banking expertise?Why only IAS types? What genetical complex RBI community is having?
- Sitendra Kumar
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. This would be a pragmatic political approach also, if one weighs the uncertainties in the horizon. 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.
- M.G.Warrier
Rajan will be good for the country, Mayaram for the government. In view of the general elections government would like to have someone at the helm of RBI who would play ball with it in vote bank politics. If it is Mayaram, expect a series of rate cuts and lower cash reserve ratios from September, irrespective of the economic situation. From the point of view of the RBI staff, Mayaram's appointment would ensure the continuation of two Deputy Governors' positions for them. If, however, Rajan becomes Governor one of the two DGs' posts will go to an IAS officer at the earliest opportunity. Since the middle of the 1980s the formula for the appointment of four Deputy Governors is: economist -1; commercial banker -1; IAS officer -1; and RBI promotee -1. When the Governor's post goes to an IAS officer, the quota for the service is released for being filled up by an RBI officer.
- A.Seshan
2 comments:
The system of induction of a DG from a commercial bank was introduced after the Security Scam in 1992. The idea was he would head DBOD/DBS but it was not always followed subsequently and DGs from commercial bankin the initial first year were not allotted DBOD/DBS.Today the PPRs blog on Raghuram Rajan, if appointed GOV, was an eye opener.In order to have the best personnel as GOV free from biases , prejudices and the burden of being follower of any particular school of thought, we may be guided by Bank of England where a person of an alien nationality serves s GOV.The focus should be on achieving well defined core objectives.
Perhaps, Sitendra Kumar is referring to the extract from his own review of Dr.Mujumdar's book--"India' s Development Agenda", quoted by PPR in a recent mail, which reads asunder:
The second part of the book is devoted to the Financial Sector reforms and incorporates three essays. There is a cogent analysis of financial inclusion which demands a systemic perspective on the part of the players.
The High Level Committee on Financial Sector Reforms under the Chairmanship of Prof. Raghuram Rajan has come in for a severe drubbing by the author.
“The recommendations of the Committee are based on amateurish understanding of the Indian economy. The Committee has failed to address the basic issue of how to reshape the financial system to promote inclusive growth. The Report belongs to the genre of IMF / World Bank reports, characterized by excellent presentation, obsessed with market theology and marked by a sense of superciliousness. The authors of the Report lack a sense of Indian economic history”.—a stern indictment indeed. Incidentally, the Committee did not include a member from R B I."
Post a Comment