The government is likely to appoint a new chief economic advisor in the next one or two months, sources said, after a search committee appointed by the finance ministry finalises the list of suitable candidates.

The government on June 30 invited applications for the appointment that will be on a deputation basis after Arvind Subramanian quit office before completion of his term.

The finance ministry’s search committee is headed by former Reserve Bank of India governor Bimal Jalan. Economic affairs secretary Subhash C. Garg and B.P. Sharma, secretary, department of personnel training are members of the panel.

Subramanian was appointed on October 16, 2014, for a 3-year term and was given an extension last year. His contract was till May 2019.

He is currently a visiting lecturer of public policy at Harvard University's Kennedy School of Government and a senior fellow at the Peterson Institute for International Economics.

His departure was made public through a Facebook post by Arun Jaitley, then a minister without portfolio in the Modi government and recovering from kidney surgery.

It stirred questions about a palace intrigue, a bitter power struggle and deep disquiet within North Block ever since Piyush Goyal was pitchforked into the position of interim finance minister until Jaitley recovered.

Jaitley said the chief economic adviser had informed him of his decision to step down a couple of days ago at a videoconferencing meet that he had held with bureaucrats in the finance ministry - an event that itself appeared to be shrouded in controversy.

Jaitley said in his post that Subramanian had told him 'he would like to go back to the United States on account of pressing family commitments. His reasons were personal but extremely important for him. He left me with no option but to agree with him'.

The 'pressing family commitment' was the birth of Subramanian's grandchild. 'I am expecting a grandchild in the US in September.' But the excuse did not convince anyone.