Mukherjee, who has held the post since 2009, is leaving at a time when Asia’s third-largest economy is taking a battering by a slowing pace of economic growth, policy gridlock in government, inflation, and sluggish investment.

Mukherjee’s successor has not yet been announced, but bureaucrats and politicians suggest Prime Minister Manmohan Singh will take over the portfolio until a cabinet reshuffle next month.

Mukherjee, 76, has withdrawn from the daily work of government, the source said. On Thursday, he was to chair a panel on the sales price for a 2G radio wave auction, but he deferred the meeting. He is unlikely to meet industrialists on Monday, the source said, referring to another planned event.

US Treasury Secretary Timothy Geithner has postponed a visit to India which had been scheduled for June 27-28.

Mukherjee, who enjoys wide cross-party support, is almost certain to win the July 19 poll for the presidency, a largely ceremonial position.