The deputy governor of Reserve Bank of India, Mr. Subir Gokarn's three year tenure ends on 23rd November this year. According to sources, although he may be considered for a possible second term by the selection panel, his reappointment to the post is highly uncertain.
The source clarified that an extension for Gokarn may not be on the cards. He said, "The Government has constituted a search panel. Technically speaking, Gokarn's name can also be considered by the panel." Gokarn assumed office as the Deputy Governor on 24 November, 2009 and turned 53 in September this year.
The government officer further said that generally a search panel is formed when a new person is to be selected for a post. He questioned, "When the present one has to be given extension or reappointment, where is the need for a panel?" adding that reappointment can take place by passing an administrative order.
The whole affair is taking place when huge differences have emerged between Finance Ministry and the central bank over rate cuts in monetary policy review. The ministry and banks have been urging the monetary regulator to reduce key policy rates for accelerating growth in the economy. On the other hand, RBI kept rates unchanged in its monetary policy review of October 30, citing inflationary conditions in the economy. Instead, it said that it could reduce rates in the last quarter of FY 2012-13.
It is speculated that Gokarn, who is a renowned economist, has always been in favour of taking monetary steps which control inflationary levels.