By IANS,
New Delhi : Finance Secretary Duvvuri Subbarao will be the next Governor of the central Reserve Bank of India (RBI), it was announced here Monday.
An alumnus of the Massachusetts Institute of Technology, Subbarao takes over from incumbent Y.V. Reddy Friday.
The announcement was made by Finance Minister P. Chidambaram amidst speculation that Reddy may be given a three-year extension.
The present Deputy Governor of Reserve Bank Rakesh Mohan was also a strong contender for the post.
Soon after the announcement was made, a leading industry lobby, referring to the economic slowdown and spiralling inflation, said it is “looking forward to a vision of the RBI Governor which will steer us through this difficult time”.
Subbarao is a member of the 1972 batch of the Indian Administrative Service, belonging to the Andhra Pradesh cadre.
In the past, he has worked as secretary to the Prime Minister’s economic advisory council which, till about two weeks ago, was headed by former RBI Governor Chakraborty Rangarajan.
An alumnus of the prestigious Indian Institute of Technology at Kanpur, Subbarao joined the civil services after earning Masters in Economics from the Ohio State university. At MIT, he was a Humphrey fellow, and earned a doctorate in economics from Andhra University.
The new central bank governor takes over at a time when India’s annual rate of inflation is ruling at a 16-year-high, even as the country’s economic growth has slowed down to 7.9 percent for the first quarter as opposed to 9.2 percent for the corresponding quarter last fiscal.
The tight monetary policy of incumbent governor Reddy has been blamed for the lower growth and it has been primarily caused by lower expansion of India’s industrial output.
In a statement, Amit Mitra, secretary general of the industry lobby FICCI, said: “Dr Subbarao takes over this critically important position at a time when an optimal and measured engagement would be required of the Governor on the one hand, controlling inflation and on the other, not allowing growth momentum to get stalled.”
“While inflation has slightly slackened, growth is showing a weakening trend. With Subba Rao’s experience as Finance Secretary and his earlier experience in the IMF, FICCI is looking forward to a vision of the RBI Governor which will steer us through this difficult time,” Mitra added.