In an unexpected move, the Indian government has appointed its Finance Secretary Duvvuri Subbarao as the Governor of Reserve Bank of India. Rao will succeed YV Reddy, who is retiring on September 5. Street has it that this move has made some heart burns including that of the Deputy Governor Rakesh Mohan who was the hot favourite for the governor’s job.
Subbaro, 59, will hold office of the RBI governor for the next three years.
Reddy who became the RBI governor in July 2003, succeeding Bimal Jalan, expressed unwillingness for an extension of his term, forcing the government to look for a replacement. Chidambaram has been candid in his support towards the incumbent governor.
D Subbarao is a an alumnus of IIT Kanpur and a 1972 batch officer of the Indian Administrative Service belonging to the Andhra cadre. Subbarao was secretary to Prime Minister’s Economic Advisory Council. He has also done stints as an economist in World Bank between 1999 and 2004 in Africa and East Asia.
An alumnus of the Massachusetts Institute of Technology (MIT) where he was a Humphrey Fellow, Subbarao also holds a doctorate from Andhra University. Subbarao joined the civil services after earning Masters in Economics from the Ohio State university.
Subbarao is taking over the top job when India’s inflation is at a very high level and also when the interest rates have gone through the roof. It’s likely Subbarao will continue with the strict policy for sometime now especially since it’s an election year.
I also think, given his credentials, this is the right move for India from a global strategy view point as Subbarao brings with him a combination of experience in high ranks.
Will definitely be worth watching what Subbarao has in store for the country.
On a different note, Andhra Pradesh seems to be on a high in the RBI agenda – First YV Reddy and now D Subbarao. Phew !!!
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