2 Names For Raghuram Rajan's Successor, Announcement This Month: Sources

New Delhi: The Modi government is expected to announce the next Reserve Bank of India Governor well before the term of the current chief Raghuram Rajan comes to an end in September.

A top source in the government told NDTV, "The country will not have to wait long for the name of the person who will replace Mr Rajan. If all goes well an announcement may come by July 15."

The indication that the government is not going to wait too long and name the next head of the country's central bank before Mr Rajan retires had come on the day he, in a letter to RBI staff members, had ruled out his availability for a second term by announcing his decision to return to academics.

Finance Minister Arun Jaitley had clarified the government's intent via a tweet which said, "The government appreciates the good work done by him and respects his decision. A decision on his successor will be announced shortly."

The government plans to make an announcement in mid-July to ensure that the next person in the hot seat gets almost two months to watch the situation and firm up a broad strategy before taking over. The government knows the next person is not going to have it easy.

Also, Mr Rajan - an experienced hand - will be holding the RBI rudder just in case there are tectonics in market and the economy as and when the announcement is made. This despite the fact that the government has already tested its capability to insulate the market when Mr Rajan said a no to a second term and the market didn't take a dive.

Government sources indicated that they are now closer to naming the next RBI Governor as the list of possibles has shrunk. A week ago there were almost half a dozen names including SBI Chairperson Arundhati Bhattacharya, RBI Deputy Governor Urijit Patel, Economist at International Monetary Fund Subir Gokarn (former deputy governor RBI), Kaushik Basu Chief Economics World Bank and even the Economic Affairs Secretary Shaktikanta Das.

But a top source said, "The choice has narrowed down it seems. The government is now looking at two names. Subir Gokarn and Rakesh Mohan, Economist with IMF and former Deputy Governor of RBI. The advantage with both is their familiarity with what the RBI operates and the global economy which is facing upheavals."

Top sources indicate that the final call will be taken by PM Modi in consultation with finance minister. Government sources said that with the PM keen to keep the inflation low and India's growth story shining amidst global gloom the government may pick a technocrat instead of making a political choice.