Despite the convention of the Reserve Bank of India (RBI) deputy-governor (DG) in charge of monetary policy being almost invariably from the community of ‘specialists’, the government still accords top priority to the IAS fraternity, even for filling this post which requires considerable domain expertise. Or so it would seem.
The government on Thursday invited applications for the post of the DG to fill in the vacancy created after exit of Viral Acharya, an economist from New York University Stern School of Business who had handled the crucial monetary policy portfolio before his departure on July 23.
To be eligible, applicants must fulfil at least one of three criteria, and what tops the list is that they must be “persons who have at least 25 years of work experience in public administration, including experience at the level of secretary or equivalent in the government of India.” Though the criteria were the sa-me in earlier instances too, this has caused speculation the new DG could also be from the IAS (Current governor Shaktikanta Das is a retired IAS officer).
While a good number of the RBI governors have been from the bureaucracy (the IAS to be precise), the DGs and executive directors have either been recruited from the pool of eminent economists and bankers, besides those promoted from the RBI’s own staff. Of course, it is also a fact that some of the most eminent governors came from the powerful IAS cadre.
Pronab Sen, former chairman of the Indian Statistical Commission, said: “Ideally, the eligibility criteria should be such that only specialists, and not generalists, can apply for the RBI DG posts. For instance, the DG (economist) should preferably be a macro/financial economist etc.”
As per rules, the central bank is supposed to have four deputy governors — two must be from within the ranks (RBI officials), one must be an economist and the other must have commercial banking background. Before Acharya, Urjit Patel, another economist, used to hold this post until he was appointed RBI governor. Governor Shaktikanta Das was a top bureaucrat of the finance ministry.
A senior government official and another source privy to the central bank’s functioning said the eligibility criteria stipulated in the latest advertisement remain unchanged as they were when Acharya was chosen.
“The eligibility conditions for DG (economist) haven’t been changed at all from the last time. The criteria for another DG (with commercial banking background) are different due to the very nature of his functioning and these two can’t be compared,” the government official explained.
However, what puzzled analysts was the government’s continued endorsements of the eligibility of bureaucrats with even diverse backgrounds (in fact, this is the first criterion) to specialised posts at the RBI. This also goes against the government’s experiment, albeit at a very small scale, in recent years with lateral entry from the private sector to some senior bureaucratic positions.
NR Bhanumurthy, professor at National Institute of Public Finance and Policy, said: “Appointing a specialist to such posts obviously helps a lot. I also think even senior bureaucrats who have handled key economic departments and established researchers in economics can also be hired.”
