Chief Economic Adviser Arvind Subramanian to stand down, return to the U.S.

By Manoj Kumar

NEW DELHI (Reuters) - India's chief economic adviser Arvind Subramanian is standing down after serving for nearly four years and would return to the United States, the finance minister said on Wednesday.

"He would like to go back to the United States on account of pressing family commitments," Arun Jaitley said in a Facebook post. "He left me with no option but to agree with him."

Subramanian, 59, joined as the chief economic adviser on Oct. 16, 2014 for a three-year term, which was later extended by a year.

The Indian-born, Oxford-educated economist was picked by Prime Minister Narendra Modi for the post, which was left vacant by former International Monetary Fund (IMF) chief economist Raghuram Rajan when he took over the reins of India's central bank.

Subramanian had earlier worked with Rajan at the IMF.

He is currently on leave from the Peterson Institute for International Economics, where he is expected to return soon.

Subramanian has been earlier criticised by some members of Modi's ruling Bharatiya Janata Party, including senior lawmaker Subramanian Swamy, for his frank views on the economy.

Praising Subramanian's contribution, Jaitley said his early diagnosis of the twin balance-sheet problem led the government to adopt the strategy of increasing public spending to support India's economic growth.

The economy grew 7.7 percent year-on-year in January-March, its quickest pace in nearly two years driven by higher growth in manufacturing, the farm sector and construction.

Subramanian also helped Jaitley in the implementation of a new nationwide Goods and Services Tax (GST) last July, which brought India's 29 states into a single customs union, and supported lower tax rates.

"Personally I will miss his dynamism, energy, intellectual ability and ideas," Jaitley said.

In response, Subramainan thanked Jaitley on Twitter for his generous words, adding it was his personal decision to return to researching and writing.

(Reporting by Manoj Kumar; Editing by Malini Menon and Sunil Nair)