The 23rd Governor of RBI, Dr. Raghuram G. Rajan, has announced officially to his team that he would not serve a second term as their chief. He has planned to go back to his academic profession after his term ends on 3 September, 2016.
Commerce Minister Nirmala Sithara said that the government appreciates the work done by Raghuram Rajan as the Governor of RBI and respects his decision to continue in academics. If YV Reddy is known for bringing in highest GDP growth in the country during his tenure, then Dr. Raghuram Rajan’s has set a landmark in combating inflation and interest rates.
Rajan belongs to a family of learned individuals, his father Mr R Govindarajan being a member of Indian Police Service (IPS) who topped his 1953 batch. Rajan was academically proficient and is an alumini of Indian Institute of Technology (IIT), Delhi and Indian Institute of Management (IIM), Ahmedabad where he earned a Post graduation diploma in business management.
After working as a professor in University of Chicago, he started handling policy issues. On 10 August, 2012 Rajan was appointed as the Chief adviser to India’s Ministry of Finance and later appointed as the Governor of Reserve Bank of India (RBI) by ex- Prime Minister Dr. Manmohan Singh.
Undoubtedly, Rajan has brought stabilisation in the economy. When he took over, Indian economy was labelled one of the ‘Fragile Five’ but his policies have shifted the country far from that list. The foreign reserves have boosted up the margin and the country’s development has shot up. Payment modes are highly expanded as he initiated mobile phone payment system as well, making it convenient from user’s point of view. He also developed a large loan database to improve mapping of distress in this area. Through such measures, inflation has been halved and savers earn positive interest after a long time. Currency has stabilised and our forex reserves are at a record high and the government has launched a 40 year bond for the first time. Many improvements have taken place in the RBI and consequently, the whole of the nation.
There have been quite a few tussles between Rajan and the government employees, for instance, Union Finance Minister Mr. Arun Jaitley, who asked him to lower interest rates but he wasn’t ready to bring it lower than the margin he sought. The media was occupied with news of their disagreements, but in the public interviews, they respected each other’s perspective. Unlike other RBI governors, Raghuram Rajan is the most popular amongst the youth and he claims a seat in clarifying and putting forward his opinions. He shares his opinions and his academic background supports him in interacting with students and people of all ages. He is dynamic, enthusiastic and carries a problem solving attitude.
He has served as a RBI governor for the least period and many educationists advocated that he should be reappointed for the next term. But, his self will to resign has to be respected and granted diligently.
The government is up with its task of choosing new RBI governor. It has shortlisted some names, four among them being, RBI Deputy Governor Urjit Patel, former Deputy Governors Rakesh Mohan and Subir Gokarn, and State Bank of India Chairperson Arundhati Bhattacharya.
The new governor is expected to control inflation like Rajan had worked for it. If everything goes well, the government is expected to announce the selected candidates’ name till 15 July. Fingers cross, let us see who shoulders this huge responsibility from now on.1