After Subbarao, who will be the next RBI governor

The government is on the lookout for the next boss of Reserve Bank of India after incumbent D Subbarao expressed his desire to "move on". Dr Subbarao, due to retire in September, was initially appointed for three years in 2008.

Finance Minister P Chidambaram told reporters on Wednesday that Dr Subbarao was not interested in the job anymore.

"We are on search and selection mode for RBI Governor," Mr Chidambaram said.

The government would ideally have wanted Dr Subbarao to continue considering the state of the Indian economy. Growth has slumped to a decade low and the Indian rupee is trading near a record low.

With elections less than a year away, the government might have been comfortable with Dr Subbarao, who's been there and seen all. However, there's another side of the story as well.

Economists such as Arvind Panagariya of Columbia University have termed Dr Subbarao's tenure as "one of the worst eras of performance by the RBI governor." That's because the Reserve Bank repeatedly hike interest rates (13 consecutive times till late last year) to rein in stubbornly high inflation.

According to Dr Panagariya, the RBI's errors compounded the break in the growth "momentum" of the economy.

History will judge whether Dr Subbarao did the right thing by going after inflation and sacrificing growth in the process, but the bigger challenge for the government now is to zero in on a new governor, someone with impeccable credentials and also with enough conviction to not bow down before its diktat.

Planning Commission member Saumitra Chaudhuri, economic affairs secretary Arvind Mayaram and chief economic advisor Raghuram Rajan have been talked about in the media as the contenders for the RBI top post.

Mr Chaudhuri, according to reports, enjoys the support of the Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan, who himself has held the RBI top job.

Mr Rajan and Mr Mayaram both reportedly enjoy the Finance Minister's confidence.

Whoever gets a shot at the top job will probably be in the proverbial hot seat as the economy faces the biggest challenge since 1991.