New Delhi: The Narendra Modi government on Friday appointed banking and finance expert Krishnamurthy Subramanian as India’s new chief economic adviser (CEA), a position that has been vacant for the last five months.
Subramanian, a PhD graduate from the University of Chicago’s Booth School of Business and currently an associate professor at the Indian School of Business in Hyderabad, has been given a three-year tenure.
“The appointments committee of the cabinet (ACC) has approved the proposal for the appointment of Dr Krishnamurthy Subramanian, Associate Professor and ED(CAF), ISB, Hyderabad, to the post of Chief Economic Adviser,” said a government press release issued on Friday afternoon.
He replaces economist Arvind Subramanian, who resigned from the post in June 2018 and left the country in August 2018. Arvind Subramanian’s term was supposed to end in May 2019.
Krishnamurthy Subramanian is widely known as a banking expert. Over the last decade, he has been a part of expert committees on corporate governance for market regulator SEBI and on governance of banks for the Reserve Bank of India.
He was also a member of the P.J. Nayak-led committee on bank governance in 2014, the recommendations of which involved setting up an independent ‘Banks Board Bureau’.
In June 2015, he co-wrote a paper with now-RBI deputy governor Viral Acharya examining the reasoning behind the deteriorating health of India’s public sector banks (PSBs).
The paper was notable for the time in arguing how PSBs needed to raise “significant capital in the next five years”, and that if they didn’t, the state-run lenders would pose a much greater systemic risk to the Indian economy than their private sector counterparts.
On demonetisation and Raghuram Rajan
Subramanian also appears to be a supporter of the Modi government’s 2016 decision to demonetise Rs 500 and Rs 1,000 notes .
On November 23, 2016, he co-authored an article titled “Demonetisation: Are the poor really suffering?”. In the piece, he argued that politicians are being disingenuous when they claim that India’s poor are facing great difficulties as a result of demonetisation.
In May 2017, after the results of the Uttar Pradesh elections, he made reference to this article in a tweet and noted that “UP outcome proves my prognosis that reports of poor suffering were either incorrect or politically motivated”.
On the exit of Raghuram Rajan as the Reserve Bank of India’s governor however, Subramanian came out swinging against the decision to not give Rajan another term.
“Only those who have worked with RGR [Raghuram Rajan] know his devotion to his motherland and can appreciate the sacrifices he has made to get an opportunity to contribute to this country,” he wrote in June 2016.