Uncertainty over the appointment of top regulatory and government officials creates unnecessary confusion. This is one area where Prime Minister Narendra Modi must improve his government’s record.
The current term of the Securities and Exchange Board of India (Sebi) chairman U K Sinha will end on February 17, but the government is yet to announce who will take over from him as the next Sebi chief, or whether Sinha will get another term.
This uncertainty and confusion over the appointment of the top market regulator, especially when the market is in turmoil, could better have been avoided.
The appointment of former Forward Markets Commission (FMC) chairman Ramesh Abhishek, who was among the main contenders for the top job, on Thursday, as secretary of the Department of Industrial Policy and Promotion (DIPP), has left Arundhati Bhattacharya, chairman of the State Bank of India, and former deputy governor of the Reserve Bank of India, Subir Gokarn, as the front-runners now.
Another extension for Sinha—he has already been there for five years (first on a three-year term and then for another two years)—is also not ruled out completely, though he is yet to be sounded out in any manner for such a possibility, going by the finance ministry officials.
In fact, former capital markets joint secretary Thomas Mathew (currently an additional secretary in the President’s office), former economic affairs secretary Arvind Mayaram, Competition Commission of India member M S Sahoo and former disinvestment secretary Aradhana Johri, had also applied for the coveted job.
Earlier, the government took over two months to finally announce the name of R S Sharma as the new Telecom Regulatory Authority of India (Trai) chairman after Rahul Khullar’s term ended on May 13.
Though the current dispensation has been fairly successful in terms of finding the right people to do a particular job in the government or regulatory authorities, prior announcements to avoid uncertainty remains the area where it needs to improve.
The ideal way to allow change of hands at the top regulatory and official levels could be the manner in which current RBI Governor Raghuram Rajan took over from D Subbarao—he started work at RBI as an officer on special duty three weeks before taking charge.
In the absence of such a possibility and now SBI chairman Arundhati Bhattacharya indicating that she might stay at the bank in these tough times—and also Sinha not getting any indication from the government as yet—has just added to the speculations with regard to the Sebi chief’s appointment.
Though already late, it would be better if the government now clears the air fast and, as quickly as possible, names the next Sebi chief.