Why Raghuram Rajan Is A Rockstar

These days Sensex and Nifty trigger more to Dr Raghuram Rajan’s future than to stock prices. His future is uncertain. Is he going to continue as the Governor of the Reserve Bank of India? Probably, it is a million-dollar question in everyone’s mind, particularly investors’. The fact is that this uncertainty is going to prevail till near September, when the incumbent Government decides his fate. Actually, it is not only his fate which is at stake but Indian economy’s too.

He is a man who needs no introduction in the finance domain. Not only is he revered domestically but globally as well. He is one of the few economists in the world who foresaw the financial debacle of 2008. His analysis of sub-prime lending flaws which had been brewing since 2000-2002 was mind-boggling.  It itself corroborates his credibility deeper. He has a pivotal role in steering our economy forward during the times when the global economy is trapped in dark times. He assumed his office in 2013 under the Congress realm. Despite the Government pressure, he has always stood stern on his bold decisions throughout his all monetary policies. He is not a man who succumbs to any pressure which was quite evident when he was ridiculed prior 2008 crises for his hypothesis where he did not give up on his stance.

If we delve into his work, we will be left nothing but amazed. Besides bringing innumerable banking reforms, his adamant approach towards inflation has been highly commendable. It does not a rocket science to understand how inflation is linked to FII, FDI inflows, unemployment rate and eventually GDP growth. He has accomplished a lot during his first tenure. To cite a few, when he assumed office, retail inflation was in the range of 9.8% and he brought it to 3.7% in 2015, which was the lowest since 1990s. I would not credit him entirely because other factors played their roles too.  And his success of making CPI as the major measuring index which is also a global standard index for measuring inflation despite the Government’s suggestion to go otherwise is also an attempt to match Indian standards to the global’s. His other focus has been on reducing non-performing assets which is another critical issue for our economy. Keeping a balance between INR-Dollar and export is another achievement. Forex Reserve has been mounting to $360 billion. The bottom line is, this man knows the fault-lines existing in the economy therefore he is the right man to fix it. If he stays, surprises will be abounding however if he leaves, so will billions dollars.

I assume everybody is backing Dr. Rajan for his second term but a few political honchos. And these politicians have no idea how this economy works. They merely want to politicize every goddamn thing. It is my earnest request to these people for not coming in between RBI and its functions.  Let it be an autonomous body.  Let it be.

Kewal Prasant

Summer Intern at Burger King Corporation

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