FM Manmohan, Once More!

Will He Do Another 1991? Indian economy is hoping for a fresh lease of life as the champion of reforms takes charge at North Block and chooses a few good men to steer the country out of the current mess  Raghuram Rajan may get key role in policymaking while Sumit Bose could replace Gujral as fin secy OUR BUREAU NEW DELHI      Prime Minister Manmohan Singh, who took charge of the finance portfolio on Tuesday following the resignation of Pranab Mukherjee, may ring in changes at the ministry as he seeks to revive economic growth, arrest the rupee's fall and deal with the fallout of a possible breakup of the euro zone. Some bureaucrats who played a key role during the tenure of Mukherjee, widely considered the front-runner to become India's next President, may have to move to new assignments.  Expenditure Secretary Sumit Bose may become the seniormost bureaucrat at the ministry succeeding RS Gujral, the revenue and finance secretary, say people familiar with the matter. Gujral had been vocal in defending a controversial retrospective amendment taxing overseas deals involving Indian assets. The amendment, widely believed to be aimed at Vodafone Plc, has become a lightning rod for criticism of Mukherjee's last months at North Block, as the finance ministry is often referred to. Singh was reportedly unhappy with the amendment because of its negative impact on investor sentiment, though he never publicly commented on the matter.  Singh may also turn to Raghuram Rajan, professor of finance at the University of Chicago and currently advisor to him, to assume an influential position in economic policymaking.  Two people with knowledge of the matter said Rajan had been approached by the Indian government. PM may Look to Induct Fresh Blood  The former chief economist with the International Monetary Fund could become chief economic advisor in the finance ministry, with incumbent Kaushik Basu set to return to his teaching job at Cornell University, they said. They, however, cautioned that Rajan was yet to accept the offer and no final decision had been taken.  Rajan, who three years ago authored a report commissioned by the Planning Commission suggesting a slew of reforms in the financial sector, is now on an honorary assignment as advisor to the prime minister.  While Singh is expected to run the ministry with the help of his key aides, former RBI governor C Rangarajan and Planning Commission Deputy Chairman Montek Singh Ahluwalia, he may be looking to induct fresh blood.  The names of 1987-batch IAS officers Arvind Mayaram and Vivek Ray, serving as special secretaries in the rural development and defence ministries, are doing the rounds for leading the charge at the department of economic affairs, which is expected to spearhead the task of reviving the economy. R Gopalan, secretary in charge of the department of economic affairs, retires on July 31.  Singh, who introduced economic reforms in 1991, is expected to use this opportunity to usher in some key structural changes on the policy front. The country's macroeconomic fundamentals do not make a pretty picture. GDP slid to a nine-year low of 6.3% in 2011-12 and the rupee fell to a lifetime low below 57 to a dollar. Speaking to journalists after stepping down, Mukherjee conceded that he may have made mistakes but asserted his decisions were taken in public interest. "Measures are urgently needed to boost domestic investment sentiment… It is time to act... Anytime there is a change of guard people expect lot of changes…We will wait and watch," said DK Joshi, chief economist, Crisil. Some doubt if the change of guard would make much difference. "I do not think that a new FM would change the sentiment as Pranab Mukherjee had pretty good standing as the FM and it is unlikely that a person at the finance ministry can bring about much change," said Madan Sabnavis, chief economist, Care ratings.