Chidambaram gives nod to Raghuram Rajan as chief economic advisor

NEW DELHI: Raghuram Rajan, a former chief economist of the International Monetary Fund, is expected to take over as the new chief economic advisor.

Finance Minister P Chidambaram has cleared his name, people in the know said. It will now have to be approved by the appointments committee of the cabinet, which includes the prime minister and home minister. But this is just a formality as Rajan is already involved with the government in his capacity as honorary advisor to Prime Minister Manmohan Singh.

Kaushik Basu's term as chief economic advisor came to an end on July 31, after a two-and-a-half-year stint.

A three-member search committee headed by the prime minister's key economic aide, C Rangarajan, and including R Gopalan, the then secretary of the department of economic affairs, and PK Mishra, secretary of the department of personnel & training, had suggested Rajan's name even though he had not applied for the post.

Rajan had famously predicted that financial deregulation could increase systemic risks.