Reserve Bank of India (RBI) Deputy Governor K.C. Chakrabarty surprised many when he resigned nearly three months before the end of his term. It set off round speculation that has not quite died down since he has not spoken about his unexpected decision. Did he fall out with RBI Governor Raghuram Rajan or was there some other reason, there are no dearth of hypotheses. Veteran observers have been quick to point out that Chakrabarty was known to speak his mind and was often at odds with Rajan’s predecessor D Subbarao on several policy matters. In August 2010 he had been stripped of many of his key portfolios after his public comments on RBI’s monetary policy on tackling inflation. However some believe that Chakrabarty put in his papers to take up a prestigious foreign assignment.Whatever may be the reason for Chakrabarty to depart, he has put the Government in an awkward position, not the least being that he quit in the middle of a general election. The Government will have to find a replacement but that may happen only after the elections when a new Government is formed. With Chakrabarti’s exit, there are two vacancies for Deputy Governor in RBI. Anand Sinha had retired in January.
Cabinet Secretary Ajit Kumar Seth is set to retire in June by when a new Government will be firmly ensconced in Dilli. He had been given a one-year extension last year so that his tenure could last till the end of UPA-2. With Seth’s exit imminent, sources say that several eligible babus have already begun lobbying. Among the front-runners in race are Sutanu Behuria, Secretary for Heavy Industries, Alok Rawat, Secretary for Water Resources and Naved Masood, Secretary for Corporate Affairs. If Behuria misses the opportunity, he is slated to retire in August. Though seniority is the obvious benchmark, the decision on naming a Cabinet Secretary would depend on the new Government and its priorities. So the suspense is going to last for a while! But most babu-watchers believe that having a Cabinet Secretary in place is a priority for any new Government.
Changing The Guard
Finance Secretary Sumit Bose’s retirement will bring in a set of new faces in the higher echelons of the Finance Ministry. A 1979-batch IAS officer Rajiv Takru, who is Secretary of Department of Financial Services has been named Revenue Secretary and will replace Bose. Sources say Arvind Mayaram, presently Secretary for Economic Affairs, is expected to be named Finance Secretary, who is usually the senior-most among all Finance Ministry Secretaries. In place of Takru, sources say, the Appointments Committee of Cabinet has appointed Gurdial Singh Sandhu, a 1980-batch IAS officer from the Rajasthan cadre. Sandhu was Principal Secretary for Urban Development and Housing in Rajasthan. However, babu-watchers are keenly waiting to hear the appointment of a new Economic Adviser in the Finance Ministry. The post has been vacant since Raghuram Rajan became Governor of the Reserve Bank of India.