Govt may clear confusion over Jalan's status today

The home ministry, the law ministry and the Reserve Bank of India (RBI) have been looking for an answer to this since August 27, when RBI Governor Bimal Jalan's nomination was announced.

To clear the confusion, the government is planning to issue a corrigendum to the August 27 notification on Jalan's nomination. The corrigendum, being sent to President A P J Abdul Kalam for his assent, will either specify the date of Jalan joining the Rajya Sabha or state that his nomination will take effect from the day he demits office in the RBI.

The RBI, according to sources, did not want to take any chances and consulted the law ministry. Attorney-General Soli Sorabjee is reportedly of the view that there is nothing wrong in Jalan continuing as RBI governor after his nomination to the Upper House since the central bank is not an "office of profit" and the governor does not draw his salary from the government.

"This is a mere technicality and will be addressed very soon, possibly tomorrow," said a source in the know of the development.

Had the RBI been an office of profit, the central bank would have had no choice but to designate its seniormost deputy governor as acting governor in the interim period till Y V Reddy took over, sources said.

True to the best tradition of corporate governance, Jalan has not been signing any files since the government announced his nomination. "He is not taking any decision relating to the central bank's affairs," a RBI source pointed out.

In RBI's history, a deputy governor was made acting governor only once for a very brief period. Deputy governor Amitabh Ghosh took over as acting governor after R N Malhotra demitted office. He was at the helm for a few days till S Venkitraman took over as the next governor.

Jalan will lead the Indian delegation at the World Bank-International Monetary Fund (IMF) meet, slated to take place from September 19-24, since Finance Minister Jaswant Singh will not be present.

Jalan will demit office after the meet is over.

In addition to Finance Secretary D C Gupta, the other names doing the rounds as successor to Reddy at the IMF are Adarsh Kishore, secretary in the department of programme implementation, Pradipto Ghosh, additional secretary in the department of economic affairs, and B P Mishra, additional secretary in the finance ministry.

Jalan is the second RBI governor to be made a Rajya Sabha member after Manmohan Singh. However, Singh's entry into the Upper House was years after he ceased to be a governor.