Subramanian’s first major task as CEA will be contributing to the process of preparing the interim Budget before the Lok Sabha elections next year. He will also work on the Economic Survey for 2018-19, likely to be presented before the full Budget for 2019-20 in July. He is taking on the role at a time when growth has slowed to 7.1 per cent (July-September data), and debates are raging on liquidity and the credit situation in the financial sector. The country is also headed to elections, possibly in summer next year.
Subramanian is not new to making policies. Known as “Subbu” to friends and students, he was a member of the Reserve Bank of India’s P J Nayak committee on governance of the boards of public sector banks (PSBs). He has also served on the Securities and Exchange Board of India’s (Sebi’s) committee on corporate governance, led by Uday Kotak.
He also contributed to the Economic Survey of 2014-15, according to his profile on the ISB website. Subramanian is a member of a number of other Sebi committees, including those on primary markets, secondary markets, inter-operability of exchanges, and alternative investments.
As part of his corporate policy work, Subramanian serves on the boards of Bandhan Bank, the first bank to be licensed since Independence in east India, the National Institute of Bank Management, and the RBI Academy.
Friends and opinions
Subramanian has a PhD from The University of Chicago Booth School of Business, where one of his advisors was former RBI Governor Raghuram Rajan, who has criticised various government policies since demitting office. He is also close to current RBI Deputy Governor Viral Acharya, whose speech in October had made the differences between the central bank and the government evident.
The friendship between Subramanian and Acharya is expected to open up another informal channel of communication between the government and the central bank. His predecessor Arvind Subramanian was reportedly not always on friendly terms with the RBI.
The new CEA was at one time under consideration to become a member of the RBI’s monetary policy committee. He has written in favour of demonetisation, calling it a “revolutionary” move to fight corruption, also claiming that the perception of the poor suffering because of the note ban was overblown by the Opposition.
However, he has not shied away from criticising the government either.
Subramanian has said the government’s decision to merge weaker banks such as Dena Bank and Vijaya Bank with stronger ones such as Bank of Baroda will not solve the problem of bad loans in the system, and more reforms were required to improve the financial health of PSBs.
A shining career
Subramanian topped his batch at the Indian Institute of Management, Calcutta, and graduated with a degree in electrical engineering from the Indian Institute of Technology, Kanpur. In previous academic roles, he has been on the finance faculty at Goizueta Business School at Emory University in the US.
Before beginning his academic career, Subramanian worked as a consultant with JPMorgan Chase in New York. He also served in a management role in the derivatives research group at ICICI.