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Bimal Jalan gets 2-year extension

BS Economy Bureau

Prime Minister Atal Bihari Vajpayee has approved the extension of Bimal Jalan's tenure as governor of the Reserve Bank of India for another two years.

Vajpayee has also cleared the appointment of former consultant to finance minister, Rakesh Mohan, as deputy governor of the RBI. Mohan's tenure is for three years. Notifications to give effect to these decisions would be issued soon.

For Jalan, this is the second extension as the head of the central bank of India. The United Front government, headed by I K Gujral, had appointed him as the RBI governor in November 1997 for a three-year term. In 2000, the BJP-led coalition government of Vajpayee gave him a two-year extension. Jalan is now poised to set a record. If he serves the extended tenure of two years, he would probably become the longest serving RBI governor.

There were a few other contenders for the job. But one of the factors that influenced Vajpayee and Finance Minister Yashwant Sinha to settle for an extension to Jalan was the desire to ensure stability at the helm of the central bank. Jalan's track record as the RBI governor was also another factor that swung the decision his way, said official sources.

The decision to appoint Rakesh Mohan was also influenced by the government's desire to maintain continuity and stability in the existing team managing the country's economy. Mohan would be succeeding Y Venugopal Reddy, who has been appointed as executive director on the board of the International Monetary Fund in Washington. Reddy joined the RBI as deputy governor in 1996 after quitting the IAS. He would be leaving the RBI on July 31.

Mohan was involved in the formulation of the last two budgets in his capacity as consultant to finance minister.

At present, he is heading ICRIER, a research body. Prior to this, Mohan was director general of the National Council for Applied Economic Research.

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