Montek Singh Ahluwalia, deputy chairman of the Planning Commission, is not in the race for the top slot at the Reserve Bank of India. RBI governor Y V Reddy’s five-year tenure is scheduled to expire in just about a week from now on September 5. There has been considerable speculation that Ahluwalia will be appointed the next governor.

“It was absurd to name me in the race for RBI governorship,” sources quoted Ahluwalia as saying, while reacting to reports in a section of the media. “If at all, one likes or aspires to be the deputy chairman of Planning Commission after having been the RBI governor. Not the other way round,” a source close to Ahluwalia told The Indian Express.

The deputy chairman of Planning Commission carries the rank of a Cabinet minister in India. He is a special invitee to the Cabinet. The RBI governor, on the other hand, carries the rank of a minister of state, which is a notch lower. Technicalities do not allow the RBI governor’s status to be upgraded since he is accountable to the Parliament through the finance ministry, government sources said.

Reddy, sources said, had written to the government in the beginning of 2008 to take the necessary steps to find a new governor since his term ended in September. “Since it is, at the end of the day, a political appointment, a last-minute decision cannot be ruled out,” a senior government functionary said. The decision to appoint the RBI governor is taken by the Prime Minister in consultation with the finance minister.

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