Mumbai: For the first time ever, the government has appointed a selection committee headed by cabinet secretary P K Sinha to shortlist candidates for the position of Reserve Bank of India Governor, after Raghuram Rajan's term comes to an end in September.
According to a report in the Times of India, the decision to appoint a selection committee comes after a mutual agreement between Prime Minister Narendra Modi and Finance Minister Arun jaitley.
While chiefs of other regulatory bodies including insurance, pension and Sebi have been earlier shortlisted by search committees, this will be the first time that RBI governor candidates will be selected by a selection committee.
The decision to conduct the next RBI governor’s slot through the financial sector regulatory appointment search committee (FSRASC) comes as a strong stance against the special treatment given to central bank chiefs and also to cool speculation over Raghuram Rajan being considered for a second term.
The FSRASC, which was set up last year, consists of additional principal secretary, Prime Minister, P K Mishra – a permanent government nominee, and three external experts—Rajiv Kumar from Centre for Policy Research, Manoj Panda of the Institute of Economic Growth and Bimal N Patel from Gujarat National Law University. Apart from the above-mentioned individuals, a finance ministry representative will also be a special invitee.
The selecting committee’s recommendation will be sent to the appointments board of cabinet headed by the PM, which will take the final decision. While a majority have people demanded that a second term be given to Raghuram Rajan, despite some differences with the government’s initiatives.
The report also highlighted that the committee selection process would be commensurate with PM Narendra Modi’s comment that appointment is an ‘administrative decision’ which will only be taken when Rajan’s term ends in September.
The process of appointing top-level officials to regulatory bodies is becoming more convoluted due to political influences. However, the decision to make FSRASC the selecting body could make the process a much easier one.
