Reddy, Kelkar in race for RBI top job

Source: The Economic Times

With the NDA leadership responding positively to the candidature of the RBI governor for a Rajya Sabha seat, Y Venugopal Reddy and Vijay Kelkar are likely to be soon engaged in a two-horse-race for the top slot at the central bank.

The distance between the world of high finance and practical politics may seem quite huge, but the RBI governor is not afraid to take the leap. Undaunted by the diminishing grandeur of the Upper House, now increasingly populated by politicians who fail to make it to the Lok Sabha rather than the eminence grise the founding fathers had in mind, Mr Jalan has been actively canvassing support for his parliamentary debut.

The lobbying seems to be paying off too, with many government functionaries favourably disposed towards his candidature. This has triggered speculation as to who will take his place at the Reserve Bank, with Mr Reddy and Mr Kelkar emerging as the frontrunners ahead of the redoubtable Planning Commission member NK Singh.

Mr Reddy is currently India's executive director at the IMF, a post which former finance secretary, Mr Kelkar, had held before returning to the finance ministry as advisor to Jaswant Singh. Mr Kelkar worked hard to come up with recommendations on tax reforms, but has remained underutilised ever since political resistance put paid to his report. He, however, enjoys goodwill of government leaders.

Mr Reddy is also well regarded for his capabilities, though the reputation didn't prove adequate in 1998 when the formation of the BJP government triggered speculation about his return to the finance ministry. The former bureaucrat, who has served as a joint secretary in the finance ministry, quit the IAS in disgust after he was passed over for promotion as additional secretary. He was pipped to the post by NK Singh, the third contender for the RBI leadership.

The support for Mr Jalan is seen as a testimony to the constituency that the country's top banker enjoys among the political class. The RBI governor is known for his proximity to VP Singh, having served as the chief economic adviser during the latter's prime ministerial tenure, while the veteran Marxist Jyoti Basu is also counted as another powerful supporter.