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India’s new chief economic advisor is an IIT-IIM alumnus & a huge Raghuram Rajan fan

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Krishnamurthy Subramanian got his PhD degree from Chicago-Booth. His prime focus has been banking, economic policy and corporate governance.

New Delhi: The Narendra Modi government Friday appointed Krishnamurthy Subramanian, an Indian School of Business professor and a student of former Reserve Bank of India governor Raghuram Rajan, as the new chief economic adviser for a three-year term.

The post of CEA has been lying vacant since Arvind Subramanian quit in July.

Sajjid Chinoy of JP Morgan, Rathin Roy of the National Institute of Public Finance and Policy, Sanjeev Sanyal, principal economic adviser to the government and Neelkanth Mishra of Credit Suisse were considered to be the front-runners for the top job.

The new CEA got his PhD degree from Chicago-Booth. He is also an IIT-IIM alumnus and has been giving his opinion on banking, economic policy and corporate governance.

A Rajan fan

A strong supporter of Rajan and his policies, Subramanian in one of his columns for Mint wrote, “On Teacher’s Day, Indians and young Indians in particular would do well to seek inspiration from former Reserve Bank of India (RBI) governor…and my teacher Raghuram Rajan. Rajan inspires as a teacher for both his professional and personal qualities.

“As someone who has gained respect all over the world for his thought leadership, Rajan is worth emulating as a professional. Since time immemorial, thought leaders — be it Patanjali, Aryabhatta and Kautilya at home or Aristotle, Plato, Newton and Einstein abroad — have been admired long after their bones have been interred. After all, ideas that transform our thinking live a much longer life than any individual can hope for,” he wrote after Rajan returned to the US.

He has also helped former CEA Arvind Subramanian in preparing the ‘Economic Survey’.


Also read: Former RBI chief on why governments and central banks differ so much


On demonetisation

According to K. Subramanian, the bottom half of the population — the poor — was not not impacted in any big way by the Modi government’s demonetisation move.

He wrote in Mint: “..people from the top half of the country’s income distribution, i.e. the richer folks, who want to exchange their honestly earned savings for new currency; and ..people who are acting as agents for the dishonest” were the ones who were impacted the most.

Notable contribution

According to the ISB website, Subramanian is one of the chief architects of corporate governance and banking reforms in India. He served on the expert committee on corporate governance for the Securities and Exchange Board of India (SEBI) and those on governance of banks for RBI.

His research in banking, law and finance, innovation and economic growth, and corporate governance has been published in the world’s leading journals, including The Review of Financial Studies, the Journal of Financial Economics, the Journal of Financial and Quantitative Analysis, and the Journal of Law and Economics.

K. Subramanian along with RBI deputy governor Viral Acharya, who had recently lashed out at the government for trying to curb RBI autonomy, submitted papers on PSU bank reforms.

Confusion after change in eligibility criteria for CEA post

After Arvind Subramanian’s resignation in July, the government put up an advertisement inviting candidates to apply for the post. Candidates were required to have a minimum six years’ experience in economic research or advisory roles. The cut-off age for candidates was 56 years.

What had surprised many was the government changed the eligibility criteria stating that a PhD degree was not mandatory.

“With the change in the criteria there was a rumour that the post would go to Sanyal, who has been actively associated with the government,” a senior government official said.

A section of the political class has registered discontent with the role of CEA going to economists with regular jobs outside India, who come here to “embellish their resumes”.

Earlier, the Swadeshi Jagran Manch (SJM), an affiliate of the BJP’s parent organisation RSS, had launched an attack on former CEA Arvind Subramanian, saying he was not aware of conditions in India.


Also read: In India, there’s a perception that govt is bad and RBI is good: Ex-CEA Arvind Subramanian


 

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3 COMMENTS

  1. May the new CEA tender the most erudite advice to the government, and may a lot of it actually be acted upon. Preparing pretty graphics to illumine / illustrate the Economic Survey is Piyush Pandey’s job. 2. Unless he was being politically correct, to say that the bottom half of the population was not adversely affected by demonetisation is a profound misreading of the ground reality.

  2. I believe Rathin Roy or Sanyal or Ila Patnaik ( though she was not in the short list) were suitable candidates for CEA post. This is in view of their working the government in some capacity and otherwise good academic qualifications. In view of this, and given that in general any one connected with RRR would have been generally ignored, it is a surprising choice. Hope he doesnot follow his teacher and talk outside his role.

  3. “According to K. Subramanian, the bottom half of the population — the poor — was not not impacted in any big way by the Modi government’s demonetisation move.”

    This man knows which side of his bread is buttered. No wonder he was found the “suitable boy” by Mr Modi & Co.

    By the way, what is the difference between chief economic advisor and principal economic advisor? There is one Mr Sanjeev Sanyal occupying the latter post.

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