Former IMF economist Dr Raghuram G. Rajan is believed to be leading the race for the post of new Chief Economic Advisor. The present advisor, Dr Kaushik Basu’s term ends on July 31.

Dr Rajan has the distinction of being the youngest person to hold the post of Economic Counsellor and Director of Research at the International Monetary Fund (IMF). He is also considered to be one of the first economists to see the financial crisis of 2008 coming.

Highly placed Government sources told Business Line , “Dr Rajan’s name is being considered actively.” However, they declined to comment on that whether Dr Rajan’s name had been picked by the Search Committee appointed to find Dr Basu’s successor.

The Search Committee is headed by the Chairman of the Prime Minister’s Advisory Council, Dr C. Rangarajan.

The Finance Ministry put out a circular on April 18 inviting applications for appointment to the post of Chief Economic Adviser in the Ministry of Finance, Department of Economic Affairs on ad-hoc deputation (including short-term contract) or contract basis. This post has the pay band and grade pay or pay scale of Rs 80,000/per month (Fixed) besides other facilities.

On November 3, 2008, the Government appointed Dr Rajan as ‘Honorary Economic Adviser to the Prime Minister’ in the rank and status of Secretary to the Government of India. He also chaired the High Level Committee on Financial Sector Reforms in 2007.

He held the position of Economic Counsellor and Director of Research between October 2003 and December 2006 at the IMF. Since then, he has been Eric J. Gleacher Distinguished Service Professor of Finance, Graduate School of Business, University of Chicago.

He has done research broadly on the role of institutions, especially financial institutions, in fostering economic development. In 2003, he was awarded the inaugural Fischer Black prize by the American Finance Association for contributions to finance by an economist under 40.

After completing his schooling from Delhi Public School, he completed graduation in electrical engineering from the Indian Institute of Technology in Delhi. He earned his MBA from the Indian Institute of Management, Ahmedabad, and his Ph.D from MIT.

Bureaucratic Reshuffle likely

There is a strong buzz that the Finance Secretary, Mr R.S. Gujral may be replaced. Though Mr Gujral has some more time as Secretary, he is likely to be given another assignment.

If Mr Gujral exits, his place could be taken by the Expenditure Secretary Mr Sumit Bose.

On the other hand, the Department of Economic Affairs Secretary, Mr R. Gopalan, is scheduled to retire on July 31.

With these changes, the Finance Ministry will have a new team in August with new secretaries and a new Chief Economic Advisor.

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