Last year, Dr Subbarao had, in media interactions, indicated that he was not keen to continue beyond September, 2013. But no RBI Governor in the past also has given out his mind about his expectations about further extension of tenure especially after the ‘normal’ 5 years term. Assuming he will not press for being relieved, politically and from a mere expediency angle, certain factors are in favour of giving a one year extension to Dr Subbarao. With 2014 Elections round the corner, experimenting with a new face at Mint Road, howsoever ‘faithful’ to North Block s/he may be, will be a risk GOI should better avoid. For the new incumbent also, it will save a lot of ‘adjustments’, if s/he takes over post-2014 Elections. My plea is in the interest of continuity at the top. RBI has seen the way in which postings of Rakesh Mohan and Gokarn(to name just two) were handled in certain circumstances. Across government, public sector and private sector, it is high time GOI gave serious thought about succession plans at the top. In SBI, out of top 72 executives at the highest level 60 will retire before March 31, 2015, according to one media report. Several institutions are headless wonders. Personally, my view is that, as stated here appointments to posts like Governor, RBI should be for a minimum period of 5 years, with provision for reappointment for a further equal term. Retirement age has become a joke, with average age of ‘decision makers’ crossing 65.
- M.G.Warrier
It is very unlikely that any extension would be granted to Shri Subba Rao. Shri Subba Rao would not also accept it in the unlikely event of such an offer being made to him as he is a man of great principles and integrity and would want people to know that he had seriously meant what he had told the Government that he is not interested in any further extension. He would perhaps go down in the History of RBI as the only Governor who had made his intention of not wanting any further extension clear even at the beginning of the first extension of tenure which made his tenure for 5 years which should have been the tenure even in the first instance.
- A. Chandramouliswaran
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Copied below is a letter (an edited version of which was) published in Business Standard during March 2013. Sharing to explain the grounds for my view:
Continuity at the top
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.
Another point is that it will be next to impossible to attract talent to these government positions, given the meager remuneration offered. It is time to revise this, factoring in market realities. The present practice has resulted in compromises on quality and the nation can ill-afford this state of affairs.
M G Warrier, Thiruvananthapuram
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