Bhubaneshwar: Finance Minister Arun Jaitley on Saturday appreciated the work of Reserve Bank of India (RBI) Governor Raghuram Rajan and said that a successor would be named soon.
The remark came after Rajan said in a letter to his colleagues that he was not seeking a second term and will return to academia when his tenure ends in September.
"Dr Raghuram Rajan has announced his intention to go back to academics at the end of his current assignment," Jaitley said on the micro-blogging website Twitter.
"The Government appreciates the good work done by him and respects his decision. A decision on his successor would be announced shortly."
Meanwhile, a political battle has begun over the announcement of RBI Governor that he would not serve a second term.
Govt didn't deserve Rajan: Chidambaram
Senior Congress leader P Chidambaram has said the government 'didn't deserve Rajan'.
"I am disappointed and profoundly saddened by the decision of Dr Raguram Rajan to leave the RBI on completion of his term on September 4, 2016, but hasten to add that I am not surprised at all," read a statement from Chidambaram, who was the Union Finance Minister when Rajan had been appointed to head the RBI .
"The government had invited this development through a craftily planned campaign of insinuations, baseless allegations and puerile attacks on a distinguished academic and economist," he continued.
"As I had said some time ago, this government did not deserve Dr Rajan. Nevertheless, India is the loser," Chidambaram declared.
On the other hand, BJP MP Subramanian Swamy, who ran a tirade against Raghuram Rajan, said the Reserve Bank head is a government employee and is not selected on the basis of popular vote.
“Raghuram Rajan is an employee of the Government of India. We don’t select employees on the basis of popular vote,” he said, reacting to Rajan’s decision not to seek a second term.
In a series of letters to Prime Minister Narendra Modi, Swamy had earlier demanded dismissal of Rajan, arguing that he is not “fully mentally Indian” and had been sending confidential and sensitive financial information around the world.
Dr. Arvind Mayaram, former finance secretary said that Rajan’s decision not to seek second term would be very costly for the economy.
"Not a good omen," he tweeted.
Rajan, in a letter to RBI staff, said that he will be returning to academia when his term ends on September 4, 2016.
“I am an academic and I have always made it clear that my ultimate home is in the realm of ideas. The approaching end of my three year term, and of my leave at the University of Chicago, was therefore a good time to reflect on how much we had accomplished. While all of what we laid out on that first day is done, two subsequent developments are yet to be completed. Inflation is in the target zone, but the monetary policy committee that will set policy has yet to be formed. Moreover, the bank clean up initiated under the Asset Quality Review, having already brought more credibility to bank balance sheets, is still ongoing. International developments also pose some risks in the short term," it reads.
"While I was open to seeing these developments through, on due reflection, and after consultation with the government, I want to share with you that I will be returning to academia when my term as Governor ends on September 4, 2016. I will, of course, always be available to serve my country when needed," it further reads.