The Reign of Rajan


An economist with an international reputation, Raghuram Rajan who recently took over as the new Governor of the Reserve Bank of India (RBI) is being looked up as the superhero that might be able to save India’s dooming economy.

Rajan, age 50, is an economics professor who has also served as the chief economist at the International Monetary Fund, recently took control over the Reserve Bank of India from D Subbarao.

This however, is not the first time Rajan has been assigned a position in the country. This will be his second iconic appointment, the first being the Chief Economic Adviser to the Finance Ministry, which he accepted in August last year.

After having signed the papers and taken over as the 23rd Governor of the central bank, Rajan stated that he did not possess any magic wand that would help him face the challenges before the country but he would definitely deal with them one at a time.

With all eyes on him, his conduct and policies will definitely have to slide under a national scrutiny for a long time, but looking at how things are currently unfolding for him, it seems that Rajan need not worry about criticism as it comes.

On the onset of his tenure he came out with a string of measures, which included more trade settlement in rupees in order to rescue the battered financial markets and hinting at a varied shift in focus from the previously occurred inflation control; all of which was pursued by his predecessor.

In his first address to the media itself, he outlined a self explanatory gist of what he had in store for his innings as the Governor of the RBI, referring to it as the “big initial package”

Impactful words and a strong foresight are the general expectations from a person holding such an influential designation, but what sets Dr. Rajan apart is the outcome of his plan of action into instant positive results.

The Indian rupee saw a jump over 2 per cent and the BSE Sensex climbed around 550 points, just a day after Raghuram Rajan took over as the governor of the central bank. Various analysts say that they had expected the 50-year-old academic and much talked about economist to have done his homework, but such detail in a plan that was so comprehensive in nature in his first statement was a blazing ray of hope.

Economic analysts also believe that Rajan plans to help the RBI maintain transparency and predictability and would soon turn out to be a guiding light, so far as the RBI’s objectives are concerned.

Having explained his purview, Dr Rajan further said that the RBI will soon be opening up financial markets more for those who were receiving the rupee in order to invest it back in.

Knowing well enough that that India is a fundamentally sound economy with a bright future, Rajan’s plan was summarized towards the end of his speech. He said that the task at hand was to build a bridge to the future, over the stormy waves produced by global financial markets, and that he had every confidence that we would succeed in doing that.

There is hope and fervor throughout the country that Raghuram Rajan will aim at vigorously defending the Indian rupee, which has undergone a drastic fall of over 20 percent since the month of May. With his arrival, there has been a sense of optimism that has been infused with his taking charge over the RBI and a promise to unleash more financial sector reforms before the rupee witnesses its next steep fall.

From ITvoir News Desk/Darab Bakhshi