What India is looking for in its next RBI governor

As speculation and drama around who indeed will be the new RBI governor builds, the government this time around is very clear on "Indian experience" as one of a qualifying criterion for the new governor.

Besides impeccable academic credentials, a deep understanding of the global economy, the new governor will have to be "well versed with India's economic reality and political economy", a bone of contention with Raghuram Rajan's critics.

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Also, on top of the list is the ability of the governor or experience in working with the economic policy-making team, Prime Minister's Office, North Block and all other stakeholders in the ecosystem.

Contrary to Western economies, in India, an RBI governor is a high level technocrat and does not have the rank of a cabinet minister - that's a small detail that the administration wants the RBI governor to remember.

Moreover, this time around, the expectation would be for the RBI governor to follow more stimulative policies, softer interest rates and that makes the likelihood of deputy governor Urjit Patel getting elevated to governor rather grim, since he is considered an inflation hawk himself.

However, the final decision lies with the finance minister and the prime Minister and it's clear that they wouldn't want to delay this appointment much.

Rajan's announcement that he will not be continuing as RBI governor when his term ends in September came earlier than usual - typically the process begins in late July or August.

There was a lot of speculation around Rajan's tenure, when the Modi government was voted to power.

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However, as he continued as governor, after spending a year as chief economic advisor in the finance ministry, besides clamping down on inflation and crony capitalists, he also took on the government on several occasions or chose to speak his mind on issues beyond the purview of the RBI which might have alienated many in the government.

But sources in the government say that disagreements on policy or his critique of the government have nothing to do with his exit, Rajan was not offered a second term for his academic interests and commitments.

Rajan had asked for a 6-12 month extension, a request that couldn't have been accommodated since the government was keen on policy continuity.

Meanwhile, NS Vishwanathan has been appointed as deputy governor to succeed HR Khan, whose term ends on July 3.