Next RBI Gov: Will it be Loyalty Over Capability?

NEW DELHI:In a government, where increasingly trust is reposed only in institutional heads with a RSS/BJP background, it will be interesting to see who finally qualifies as the replacement of Raghuram Rajan. Rajan under vicious attack from BJP MP Subramanian Swamy and facing resistance from at least three “hostile” BJP ministers took the dignified exit route by announcing his resignation two months before his term was to end.

Given the present government’s growing reputation of being resistant to independent thinking bureaucracy, it remains to be seen whether a self respecting economist of repute will be willing to step into what has become a ‘hot seat’. More so as the criticism against Rajan was often in the public domain, with his views on the economy striking a chord in even those who did not necessarily agree.

Several lists of possible replacements are being floated. One by Reuters citing an unidentified official includes Vijay Kelkar, Rakesh Mohan, Ashok Lahiri, Urjit Patel, Arundhati Bhattacharya, Subir Gokarn and Ashok Chawla, Interestingly most of them have been Congress appointments in the past, with at least some of them seen as being very close to former UPA Finance Minister P.Chidambaram. This is certainly not going to be seen as a valuable qualification by the BJP for even though the overall thrust of their politics is the same, an individual’s past and present affinities do matter to the government in power.

Senior economists do place Arundhati Bhattacharya, the State Bank of India chief, as one who would do a good job as the RBI Governor. As one well known economist said on condition of anonymity, “she is the best perhaps in this list, she is competent, home grown, quiet in her approach and does her work well.” He was of the view, like others, that this list is probably not a shortlist as the media is seeking to project, but a “wish list” of sorts for some sections in government. He was of the view that the government was caught a little by surprise by Rajan’s decision, and is only now going to put its hat together to look for a replacement.

Rajan did not have much of a chance for a second term, sources said, more so as he was seen as Congress vice president Rahul Gandhi’s choice and not even Chidambaram’s per se. Besides, he was “too vocal” and “too media savvy” to please the PM Modi government where all Ministers and institutional heads have been asked to stay out of the media glare. Rajan was very accessible to journalists, and as sources said, “give to speaking his mind out.”

Of the list ---in the absence of any other names---Vijay Kelkar, Ashok Lahiri and Ashok Chawla are probably better qualified that the others insofar as the current Modi government is concerned. Others have held posts under the UPA government, with Urjit Patel being one who has mended fences considerably with the BJP since the government came to power.

Kelkar has worked closely with the BJP, today and in the past, is more trusted than the others and has an amiable personality to boot. However, he is 74 years of age and this could go against him if PM Modi decides to stick to a rule he had initially declared as the bottom line for his appointments.

As sources pointed out, all the names in the list are in the public domain, tending to remain close to the establishment. Many of them worked with the Congress in the past, as well as with the BJP, and now are again seen as being fairly close to the current dispensation. How close does PM Modi see them to be , will of course determine the RBI appointment.

“Kiteflying” is how one senior economist dubbed it, when asked to comment on this media list. In his view the choice could settle on someone entirely different. More so, as the government has given loyalty to the RSS?BJP dominance over capability in recent important appointments. The latest bringing cricketer Chetan Chauhan to head a premier fashion institute has become an issue of ridicule on the social media. Not so long ago the students and faculty of the Film and Television Institute, as well as many filmmakers, were part of a long protest against the appointment of Gajendra Chauhan. The new censor board chief Pahlaj Nihalani, close to the BJP/RSS, has been creating waves unsettling Bollywood ever since his appointment.

As the sources said, the government is not going to take a risk with the new RBI Governor. It will have to be

1. Someone who PM Modi trusts implicitly;

2. A former bureaucrat preferably who does not rock the boat with public statements;

3. A Governor who allows the government to take the credit for economic policies without giving his own contrary views;

4. And yet, if possible, a man whose credentia as an economist for this all important job pass muster.

A tall order.