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Subir Gokarn, whose three-year term as Deputy Governor of the Reserve Bank of India ends on November 23, may not get extension, according to a highly placed source.
“The Government has constituted a search panel. Technically speaking, Gokarn’s name can also be considered by the panel,” the source said. Gokarn, who turned 53 last month, took over as the Deputy Governor on November 24, 2009.
However, a senior Government official said that normally formation of search panel implies selection of new person.
“When the present one has to be given extension or reappointment, where is the need for a panel?” he asked. This can be done just by an administrative order, he informed.
This whole episode is taking place at a time when strong differences between the Finance Ministry and the RBI have emerged over rate cuts.
The Finance Ministry has been advocating a rate cut to boost growth, but the central bank maintained status quo in its policy review on October 30, citing inflation as a concern.
Gokarn, an eminent economist, is believed to be in favour of controlling inflation. He is also tipped to be leading the race for succeeding Subbarao, whose extended term will end next year.
The Government, in August, extended the term of another Deputy Governor K. C. Chakrabarty by two years, that is, till June 30, 2014.
It was an administrative decision without recommendations from any search panel.
On the other hand, in August last year, the Government approved the extension of the term of Subbarao as the Governor up to September 4, 2013.
The RBI Act
The RBI Act of 1934 prescribes the appointment of a Governor and a maximum of four Deputy Governors.
Of these four, two are normally selected from the central bank, one from a commercial bank and the remaining one preferably from the economist community.
Among the present Deputy Governors, Anand Sinha and H. R. Khan are from the RBI, Chakrabarty is from a commercial bank and Gokarn is from the economist category.
The Union Government appoints the Governor and Deputy Governors. They will hold office for term not exceeding five years.
They will, however, be eligible for re-appointment. They can continue in office till the age of 62 years or till further order.
> shishir.sinha@thehindu.co.in
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