A top economic policy adviser to Prime Minister Manmohan Singh, C. Rangarajan, has resigned after nearly four years helping guide Asia’s third largest economy and is set to enter Parliament.
Sound initiatives: C. Rangarajan, who served as RBI governor from 1992 to 1997, helped make the central bank more autonomous. Photograph: Ramesh Pathania / Mint
Rangarajan earlier served as governor of the Reserve Bank of India (RBI) from 1992 to 1997 during which time he helped make the bank more autonomous and introduced greater flexibility in monetary policy to lift growth and help with price stability. He was appointed to lead the prime minister’s Economic Advisory Council in 2004 after the election of a Congress party-led coalition.
“Yes, he (Rangarajan) has resigned and orders have been issued to appoint Suresh Tendulkar to head the council,” said a senior member of the advisory council, who did not wish to be identified. Rangarajan, he added, was being nominated to the upper house of Parliament and could take on a “larger role.”
India’s economy has expanded at an average 8.8% over the past four years but is expected to moderate this financial year with inflation at a 13-year peak and interest rates at their highest in seven years.
Asked when he would take over as the panel chief, Tendulkar said, “It could be soon. The details are being worked out.” The council is due to present its economic review for the current fiscal year next week.
Rangarajan, a respected economist with a doctorate from the University of Pennsylvania, has also served as governor of Andhra Pradesh. He told reporters on Wednesday the Indian economy is expected to grow 7.5-8% in the fiscal year ending March, slower than the central bank’s estimate, while inflation would cool by March-end.
(Rajkumar Ray contributed to this story.)