Raghuram Rajan served as chief economic advisor to the government, working closely with the finance minister
A former International Monetary Fund chief economist is taking over as the head of India's central bank, as it works to revive the falling rupee.
Raghuram Rajan, 50, assumes the top job at the Reserve Bank of India on Wednesday.
He arrives at a time when the rupee has plunged nearly 20% since May and the economy is slowing.
The new bank chief, known for having predicted the 2008 global financial crisis, will replace D Subbarao.
Mr Rajan will also have to contend with India's current account deficit, a broad measure of trade, and the economy growing at its slowest pace in 10 years.
In the April-to-June quarter, the economy grew at a rate of 4.4%, compared with the same period in the previous year, the slowest quarterly expansion in four years.
On Tuesday Goldman Sachs cut its GDP growth forecast for India to 4% from 6%.
August also saw India's manufacturing sector shrink for the first time for four years.
Many believe Mr Rajan has raised expectations of adopting unconventional ways to revive the rupee and boost growth.
"Economic policymakers require an enormous dose of humility, openness to various alternatives (including the possibility that they might be wrong), and a willingness to experiment," Mr Rajan wrote in a column on the Project Syndicate website last month.
He has also said that "all options were on the table" to stabilise the currency.
Mr Rajan is a well-known academic and writer of a prize-winning book, Fault Lines: How Hidden Fractures Still Threaten the World Economy.
Rajeev Malik, a Singapore-based economist, says Mr Rajan's "rock star academic image could be a hindrance".
"That is because it has generated unrealistic hope that he has some magical prescription to fix our problems," he wrote in the Business Standard newspaper on Tuesday.
Source: BBC News - Business http://www.bbc.co.uk/news/world-asia-india-23955219#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa
