Who will replace Raghuram Rajan as RBI Governor?

The government is planning to appoint an economist to succeed Raghuram Rajan rather than a bureaucrat as Governor of the Reserve Bank of India.

According to Times of India, former Reserve Bank deputy Governors Rakesh Mohan and Subir Gokarn, and current deputy Governor Urjit Patel are being considered as candidates for the post. Others in the line are World Bank Chief Economist Kaushik Basu and former chief economic adviser Ashok Lahiri.

"The government is more keen on appointing an economist as the RBI Governor," said a senior official. "Bureaucrats are not under active consideration." Chief Economic Adviser Arvind Subramanian, too, could be a possible candidate, but as of now he is considered to remain in the finance ministry.

The government feels appointing an economist will send a strong signal to the international community and address concerns over the RBI's monetary policy independence.

Successor to Rajan is expected to be announced next month. The decision will be made by Prime Minister Narendra Modi in consultation with Finance Minister Arun Jaitley.

According to the report, the RBI governor's role will get diluted in setting interest rates with a monetary policy committee taking over the role. The six-member committee will have three members appointed by the government and three by the RBI. It will be headed by the RBI governor.