Raghuram Rajan likely to be next CEA, to join by Dec

Raghuram Rajan, currently professor of finance at the University of Chicago’s Booth School of Business, has been shortlisted as the next chief economic advisor in the finance ministry.

Rajan, also an honorary economic advisor to Prime Minister Manmohan Singh, is likely to join the government as CEA by December, since the official formalities, including the mandatory security clearance, could take some time, a senior government official said.

Kaushik Basu, the current CEA, will demit office by next month. During the period till December, Dipak Dasgupta, at present principal economic advisor in the finance ministry, will take temporary charge of the CEA’s office.

Ajay Chhibber, assistant secretary general at the United Nations and the UN Development Programme’s regional director for Asia and the Pacific, was placed at number two in the shortlist approved by the government. If Rajan completes the formalities and joins the government as CEA by December, Chhibber is expected to find a berth in the Planning Commission, possibly in charge of the new office to evaluate government programmes.

For Rajan, who earlier worked as chief economist at the International Monetary Fund, the CEA’s job will make him a key member of Manmohan Singh’s team of officers to oversee the management of the economy and economic policies. Rajan’s name had figured a few years earlier as one of the candidates to head the Reserve Bank of India. The government had opted for then finance secretary Duvvuri Subbarao, who completes his extended tenure next year.

With the induction of Rajan and likely return of Chhibber, the government will have got relatively younger economic administrators in key positions. In the finance ministry, Economic Affairs Secretary R. Gopalan, who got an extension till July 31 after his retirement, is likely to get an extension of one more month, giving rise to expectations that a reshuffle of finance ministry secretaries will take place before the end of August.