Dream job?

8216;8216;He Reddy will change what I started and continue with what he had started,8221; said Bimal Jalan.

8216;8216;I would desire the Indian currency to become as good as the dollar, yen, pound sterling or the euro. It is up to Reddy now to fulfil the aspirations,8217;8217; added Jalan.

8226; Who is Dr Reddy? A self-made man, Venu8212;as Reddy is called by close friends8212;is known for his academic brilliance and his skill of communicating with markets. As a RBI deputy governor earlier Reddy helped India fight the 1997 crisis that gripped South East Asian economies.

Reddy8212;who gets a five-year term as RBI governor8212;will have to draw on his vast experience to ensure that the scorching pace of the economy continues unabated. He certainly has all the credentials to do so. An alumni of Andhra Pradesh8217;s government schools and colleges, he joined Indian Administrative Service IAS in 1964. He has since held key posts in the finance ministry, the central bank and the International Monetary Fund as an executive director.

Reddy was a senior official at the finance ministry who oversaw the economy during the first Gulf War and the resultant oil crisis. He also taught in England8217;s London School of Economics and is widely acknowledged as the architect of debt market reforms in India this past decade.

As Deputy Governor in the RBI, Reddy looked after the monetary policy, exchange rate policy, internal and external debt management, foreign exchange reserves management and economic research.

8226; 8216;No policy deviations8217;

Reddy8217;s immediate task will be to manage the huge foreign exchange reserves now racing to touch 100 billion. He has to balance the appreciating rupee with the worries of Indian exporters and importers.

Raghuraman Rajan, Chief Economist-designate, IMF, believes that Reddy is the perfect man to maintain a steady heartbeat for the country8217;s stable economic policies. 8216;8216;Not to say he won8217;t bring about any changes. But there won8217;t be any abrupt or disruptive policy deviations which will hamper growth,8217;8217; says Rajan.

He says Reddy is a capable economist who will continue the trend of reform initiated by Dr Jalan, and steer India towards progress. On Dr Jalan8217;s tenure, Rajan said, there were many points he could highlight but preferred to look at the larger picture. 8216;8216;Under his leadership, was the monetary policy good for the country? Were there any crises? If the answers are 8216;yes8217; and 8216;no8217; for the above, which they are, we are talking of a productive tenure here.8217;8217;

IDFC chief Nasser Munjee was also enthusiastic about Reddy8217;s arrival. 8216;As you know, Venu was instrumental in the setting up the IDFC. He has a deep intellectual understanding of the economy and I8217;m sure he will take appropriate measures to keep things stable.8217;8217;

8226; Challenges ahead

Though Reddy is taking over the economy at a relatively good time there are still major challenges ahead. High fiscal deficit is one of them. A growing deficit of about 53 billion, or nearly 11 per cent of gross domestic product, including the debt of the states and the federal government, will be a major challenge for the new governor. India has been already given a junk status by the international rating agencies8212;thanks to high government debt.

8216;8216;High fiscal deficit of the government is a big problem. Sooner or later, Dr Reddy will have to tackle it ruthlessly,8217;8217; says a Mumbai economist. Reddy will also have to continue the low interest rate regime initiated by Jalan so as to maintain the growth momentum of the economy and encourage fresh investment from the corporate sector. How Dr Reddy tackles the fiscal problems of a growing Indian economy will certainly become case study in the years to come.

With inputs from Shefali Anand