Chief economic adviser Raghuram Rajan will be the new RBI governor after incumbent D Subbarao retires on September 5.
Finance Ministry's office has confirmed the appointment for three years..
There were two other contenders -- economic affairs secretary Arvind Mayaram and Planning Commission member Saumitra Chaudhuri.
Already, incumbent D Subbarao had said that he wants to move, Finance Minister P Chidambram had said earlier. Subbarao retires on September 5.
Subbarao was initially appointed for three years in 2008 and then got a two-year extension. His last extension was reportedly approved by the prime minister despite a different view taken by then finance minister Pranab Mukerjee, who was apparently miffed with RBI for not lowering the policy rate even when gross domestic product growth took a plunge.
Going by its past experience of differences between the central bank and the finance ministry, the government has preferred a person who could bridge this gap.
What goes in favour of Rajan is his international experience and understanding of the global economy at a time when external factors are pulling down the rupee.
Some government functionaries said Rajan was brought as chief economic adviser so that he could be elevated as the RBI governor later.
Source : Business Standard
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