The government has appointed three external members to the central bank’s panel that decides interest rates, said a government official. These three members are -- Ashima Goyal, member of Economic Advisory Council of Prime Minister, Shashanka Bhide, senior advisor at National Council for Applied Economic Research and Jayanth Varma who is a professor in Indian Institute of Management, Ahmedabad.
The appointment has come after the government faced widespread criticism over failing to act on time to appoint an external panel to the Monetary Policy Committee (MPC). Last week, Reserve Bank of India (RBI) had to defer its three-day interest-rate meeting, without giving any reasons or a new date of its policy decision. The meeting was scheduled on September 29, 30 and October 1.
Sources indicated that the fresh dates for the MPC meeting will be shortly announced by the central bank and most likely it will be held early next week.
Experts say that all three hold rich experience and are suitable for the position.
For instance, Goyal is also an independent director at Edelweiss Financial Services, IDBI Bank and SBI General Insurance. She was also a visiting fellow at the Economic Growth Centre at Yale University, USA.
Bhide, also serves as a member of Board of Governors of the Institute for Social and Economic Change in Bangalore. His research covered a number of areas in agriculture, macroeconomics modelling and socio-economic issues. Jayanth Varma is into wide research work in the area of financial markets including currency and derivatives. He is also interested in broader issues related to the financial sector as also in mathematical modelling and computer simulation.
The six person MPC was without three external members after their term expired last month. According to the rules, the rate-setting committee requires at least four members to be present at a meeting.
While the search committee, headed by Cabinet Secretary Rajiv Gauba, has zeroed in on the candidates and recommended them to the government, the appointment process was delayed as certain processes, such as security clearances of some members, had not completed on time.
The search committee includes RBI Governor Shaktikanta Das or a deputy governor representing him, NITI Aayog Vice-Chairman Rajiv Kumar, and Economic Affairs Secretary Tarun Bajaj.