Chief Economic Adviser Arvind Subramanian is learnt to be the top contender for the post of World Bank’s chief economist, a person close to the development said. The World Bank has kickstarted its search for the Chief Economist and the process is likely to be completed within a month.
“The World Bank is learnt to have reached out to Subramanian after the controversial exit of Paul Romer last month. Subramanian has shown his willingness for the position. A final confirmation is awaited from the World Bank,” the person cited above said.
When contacted by The Indian Express, the World Bank said, “The search for World Bank Chief Economist has just commenced. We will not engage in speculation and will only make an announcement when the Chief Economist has been selected.” Meanwhile, an email sent to Subramanian did not elicit any response.
If finalised, Subramanian would be the second Indian after Kaushik Basu to be the Chief Economist of the World Bank. Basu had held the charge from 2012-16, succeeded by Romer who quit in January this year following controversial comments about the methodology of Bank’s Ease of Doing business ranking and its detrimental impact on Chile’s ranking.
In an interview with The Wall Street Journal on January 12, Romer had said the decline in Chile’s ranking had been a result of repeated changes in methodology and may have been the result of the World Bank staff’s political motivations.
Shanta Devarajan, senior director for Development Economics, had taken charge as the acting World Bank group chief economist after Romer’s exit.
The World Bank is expected to announce the new appointment after the annual spring meetings of the International Monetary Fund and World Bank that are scheduled to be held in Washington, DC, on April 20-22.
Subramanian’s three-year term as the chief economic adviser to the government was extended by a year in September 2017. Subramanian has, over the last three years, brought new ideas in public discourse such as the JAM–Jan Dhan, Aadhaar and Mobile–trinity. He was closely involved in drafting the Goods and Services Tax Act and had also authored the ‘Report on the Revenue Neutral Rate and Structure of Rates for the GST’ in December 2015.
He also advised the government on resolution of banking sector distress through issuance of recapitalisation bonds. Also, he was quite vocal in his criticism about RBI’s monetary policy stance last year, saying there was a “plausible alternative macroeconomic assessment”.
Subramanian had also pushed for higher spends by the government at a time when the private sector was reluctant to invest, and advocated the setting up of a state-owned asset reconstruction company to take care of the mounting bad loans problem. The office of the CEA had remained vacant for over a year after Raghuram Rajan was appointed Reserve Bank of India Governor in September 2013.