On April 30, 2025, the Indian government terminated Dr. Krishnamurthy V. Subramanian’s tenure as India’s Executive Director at the International Monetary Fund (IMF) with immediate effect, six months before his three-year term was set to conclude. The decision, approved by the Appointments Committee of the Cabinet (ACC) chaired by Prime Minister Narendra Modi, has drawn significant attention due to its timing and the absence of an official explanation. Subramanian, a noted economist and former Chief Economic Adviser (CEA) to the Government of India (2018–2021), represented India, Bangladesh, Sri Lanka, and Bhutan on the IMF’s Executive Board since November 1, 2022. This article examines the reported reasons for his recall, focusing on allegations of impropriety involving Union Bank of India’s bulk purchase of his book, India @ 100: Envisioning Tomorrow’s Economic Powerhouse, and incorporates perspectives from international newspapers and magazines, alongside Indian media reports.
Reported Reasons for Termination
The Indian government has not provided an official reason for Subramanian’s termination, but credible reports from Indian and international sources point to two primary issues: his public criticism of IMF data practices and allegations of ethical misconduct related to the promotion of his book.
1. Criticism of IMF Data Practices
Subramanian, known for his forthright approach, repeatedly questioned the IMF’s data methodologies, particularly its growth projections for India. In a post on X dated April 6, 2024, he highlighted the IMF’s inaccurate forecasts, noting that India’s actual growth rates—9.7% in FY21-22, 7% in FY22-23, and 7.6% in FY23-24—consistently exceeded IMF estimates, with error margins as high as 2.1%. He argued that these discrepancies undermined the IMF’s credibility. In February 2025, Subramanian and his advisors further criticized the IMF’s weighted rating approach as “skewed, misleading, and against the spirit of transparency,” according to The Indian Express. These remarks reportedly strained relations with IMF officials, with The Financial Times noting that such public critiques from an Executive Director were “highly unusual” and likely contributed to tensions. The IMF, in a statement to Business Standard, clarified that Subramanian’s termination was solely India’s decision, distancing itself from the controversy.
2. Allegations of Impropriety in Book Promotion
A significant factor in Subramanian’s recall centers on allegations that he misused his IMF position to promote his 2024 book, India @ 100, published by Rupa Publications. The book outlines a roadmap for India to become a $55 trillion economy by 2047. According to The Economic Times and The Print, Subramanian allegedly pressured public and private organizations to purchase bulk copies of the book, raising concerns about ethical conduct and potential misuse of public funds.
The most prominent controversy involves Union Bank of India, a public sector lender, which purchased 189,450 paperback and 10,422 hardcover copies of India @ 100 for an estimated ₹7.25 crore (approximately $860,000), as reported by The Economic Times and CNBC TV18. Internal bank correspondence, cited by Business Standard, reveals that the central office ordered these copies for distribution to customers, corporates, schools, colleges, and libraries across India, with a 50% advance payment made to Rupa Publications before the book’s August 2024 release. The bank’s 18 zonal offices were each assigned over 10,000 copies, with the remaining cost covered under the bank’s miscellaneous revenue budget.
This purchase, described as “highly unusual” by The Economic Times given that English-language books in India rarely sell beyond 10,000 copies, has drawn scrutiny for lacking approval from competent authorities. The All India Bank Employees’ Association (AIBEA) flagged “certain lapses” in the procurement process, noting that the expenditure violated Central Vigilance Commission guidelines, according to CNBC TV18. The association demanded a probe into what it termed “wasteful expenditure,” and the bank’s General Manager was suspended pending an internal review, as reported by Business Standard. The Congress party, citing internal bank documents, alleged that the purchase constituted a “wastage of public money” to promote government propaganda, with spokesperson Supriya Shrinate questioning whether the transaction involved a conflict of interest or an “indirect bribe” to secure an extension for Union Bank’s MD and CEO, A. Manimekhalai.
International outlets have also covered the controversy. The Wall Street Journal reported that the scale of the book purchase raised “serious questions about the misuse of public funds,” noting that such actions by a public sector bank could undermine trust in India’s financial institutions. The Economist described the incident as part of a broader pattern of “politically motivated financial decisions” in India, suggesting that Subramanian’s proximity to the ruling Bharatiya Janata Party (BJP) may have emboldened his promotional efforts.
3. Diplomatic and Strategic Timing
The recall’s timing, days before an IMF Board meeting on May 9, 2025, to review a $1.3 billion climate resilience loan to Pakistan, has fueled speculation about strategic motives. India has opposed IMF financing to Pakistan, particularly after the April 22, 2025, terror attack in Pahalgam, Jammu & Kashmir, which killed 26 people and was linked to Pakistan-backed terrorism, according to Indian officials. Subramanian’s reported opposition to the IMF’s review policy for Pakistan’s debt obligations may have complicated India’s diplomatic strategy, as noted by The Hindu BusinessLine. The Financial Express suggested that the government may have sought a nominee more aligned with its stance, with Finance Secretary Ajay Seth rumored as a potential replacement.
Bloomberg reported that Subramanian’s recall could signal India’s intent to adopt a more assertive posture in multilateral forums, particularly on issues involving Pakistan. The outlet noted that Parameswaran Iyer, India’s Executive Director at the World Bank, would represent India at the May 9 meeting, indicating a temporary arrangement to ensure continuity.
Union Bank’s Role and Allegations of Public Money Misuse
Union Bank of India’s bulk purchase of India @ 100 has emerged as a focal point of the controversy. The bank’s decision to spend ₹7.25 crore without transparent approval processes has been widely criticized. The National Heraldreported that staff unions labeled the expenditure “wasteful,” questioning the bank’s rationale for distributing nearly 200,000 copies. The AIBEA’s letter to the bank’s MD, cited by Business Standard, demanded clarity on who authorized the purchase and whether it complied with procurement regulations. The union also raised concerns about the bank’s involvement in promoting a book perceived as aligned with the government’s economic narrative.
The Congress party’s allegations, reported by The Economic Times, intensified the debate, claiming that the purchase was a deliberate attempt to boost Subramanian’s book sales and indirectly support the BJP’s agenda. The party questioned whether Finance Minister Nirmala Sitharaman or the Department of Financial Services approved the transaction, and whether it constituted a conflict of interest given Subramanian’s prior role as CEA. The Wall Street Journal echoed these concerns, noting that the lack of transparency in the procurement process could erode public confidence in India’s banking sector.
Union Bank, responding to stock exchange queries, admitted to the purchase but claimed it was not material under SEBI disclosure norms, according to CNBC TV18. The bank acknowledged “certain lapses” in the procurement process, which are under internal examination, and suspended a senior official. However, no official response from Subramanian or the government has addressed the allegations directly.
Subramanian’s Background and Tenure
Dr. Krishnamurthy Subramanian, born May 5, 1971, in Bhilai, Chhattisgarh, is a distinguished economist with degrees in electrical engineering from IIT Kanpur, an MBA from IIM Calcutta, and a Ph.D. in financial economics from the University of Chicago Booth School of Business, mentored by Raghuram Rajan. He served as India’s CEA from 2018 to 2021, authoring influential Economic Surveys and introducing concepts like “Thalinomics.” Appointed to the IMF in August 2022, Subramanian was a vocal advocate for India’s economic interests but faced criticism for his confrontational style, as noted by The Economist.
His tenure contrasted with that of his predecessor, Surjit Bhalla, who completed a full term and was re-elected. Subramanian’s recall is described as “extremely rare” by The Print, underscoring the significance of the government’s decision.
International Perspectives
International media have provided nuanced analyses of Subramanian’s exit:
- The Financial Times emphasized the diplomatic implications, noting that Subramanian’s public criticism of the IMF was “unprecedented” for an Executive Director and likely prompted India to act to preserve its influence within the agency.
- The Wall Street Journal focused on the book controversy, highlighting the “unusual scale” of Union Bank’s purchase and its potential to damage India’s reputation for financial governance.
- The Economist contextualized the incident within India’s domestic politics, suggesting that Subramanian’s alignment with the BJP may have encouraged his aggressive book promotion, but the resulting backlash forced the government’s hand.
- Bloomberg underscored the strategic timing, linking the recall to India’s opposition to Pakistan’s IMF loan and suggesting that Subramanian’s outspokenness may have been a liability in delicate negotiations.
Implications of the Termination
Subramanian’s recall has far-reaching implications:
- India-IMF Relations: His criticisms may strain India’s relationship with the IMF, which values diplomatic consensus. The government’s swift replacement efforts, as reported by India Today, aim to mitigate this risk.
- Domestic Political Fallout: The Congress party’s allegations and the AIBEA’s demands for a probe, covered by The National Herald, have politicized the issue, potentially embarrassing the government and fueling debates about public fund misuse.
- Banking Sector Trust: Union Bank’s actions, as scrutinized by The Wall Street Journal, could undermine confidence in India’s public sector banks, particularly if further irregularities are uncovered.
- Subramanian’s Career: Subramanian, who has not commented publicly, may return to academia at the Indian School of Business or pursue other roles. The allegations, however, could impact his future appointments, as noted by The Economist.
Conclusion
The abrupt termination of Krishnamurthy Subramanian’s IMF tenure reflects a complex interplay of professional missteps, ethical allegations, and strategic considerations. His criticism of IMF data practices strained relations with the agency, while the controversy over Union Bank of India’s ₹7.25 crore purchase of India @ 100—without clear approval from competent authorities—has raised serious questions about misuse of public funds. International media, including The Financial Times, The Wall Street Journal, The Economist, and Bloomberg, have highlighted the diplomatic and governance implications, while Indian outlets like The Economic Times and Business Standard have detailed the domestic fallout. As the government searches for a replacement, the incident underscores the need for transparency and accountability in both international appointments and public sector financial decisions.
References
- The Indian Express, May 4, 2025
- Business Standard, May 5–6, 2025
- The Economic Times, May 6, 2025
- The Print, May 5, 2025
- The Financial Express, May 4, 2025
- The Hindu BusinessLine, May 4, 2025
- CNBC TV18, May 6, 2025
- The National Herald, May 6, 2025
- India Today, May 4, 2025
- The Financial Times, May 5, 2025
- The Wall Street Journal, May 6, 2025
- The Economist, May 6, 2025
- Bloomberg, May 5, 2025
- Posts on X, May 3–6, 2025
