oppn parties Dr Rajan Should Not Have Been Hounded Out

News Snippets

  • EMI's set to rise after the RBI hikes key policy rate
  • Calcutta HC says that the right to privacy does not end with the death of a person
  • Supreme Court says that a delayed order of preventive detention makes it invalid
  • Shashi Tharoor posts an erronous map of India in his manifesto, rectifies the error after criticism
  • Sonia Gandhi to take a call on who will be Rajasthan chief minister
  • Mallikarujun Kharge to be the new candidate to oppose Shashi Tharoor in the Congress presidential elections
  • RBI says that the September inflation rate may be higher than 7%
  • RBI hikes key rates by 50bps, downwardly revises FY23 growth rate to 7% from 7.2% earlier
  • Stocks recover well on Friday: Sensex gains 1016 points to0 57426 and Nifty 276 points to 17094
  • Mirabai Chanu wins gold easily at the National Games
  • In a first, the Supreme Court recognizes marital rape, although for the limited purpose of allowing married women the right of abortion up to 24 weeks if they conceived as a result of forced sex by their husbands
  • Air India cuts discounts on base fare to students and senior citizens from 50% to 25%
  • Mallikarjun Kharge and Digvijay Singh are being touted as frontrunners to take on Shashi Tharoor in the elections for the post of Congress president
  • Sonia Gandhi will decide who will be Rajasthan CM if she feels there is a need to change guard after the near-rebellion by MLAs in the state
  • Ashok Gehlot bowed out of the race for being Congress president after meeting Sonia Gandhi
RBI hikes key rates by 50bps, stocks jump and recover 50% of the losses incurred in the last few session
oppn parties
Dr Rajan Should Not Have Been Hounded Out

By Sunil Garodia
First publised on 2016-06-20 12:23:21

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator.
After much soul searching and discussions with the government, Dr Raghuram Rajan has decided to return to academia once his current tenure as Reserve Bank of India governor ends in September this year. While this is sad news as far as financial markets in India are concerned, it is not as earth shattering as the media and the Congress would have us believe. Rajan was no doubt the best man at the best place and at the best time. He has steered the Indian economy through a difficult patch with elan. His achievements in controlling inflation and convincing the government in maintaining fiscal prudence have been instrumental in keeping growth at a healthy rate. While industry has been cribbing about his steadfast refusal to lower interest rates, Dr Rajan has held his own on the grounds of not unleashing undue inflationary pressure through easy liquidity. His unfinished work in cleaning up the act of PSU banks and introducing a semblance of responsibility in the banking system was exemplary and needs to be taken to its logical conclusion by his successor.

Having said this, two things need to be kept in mind. The RBI governor can only be effective if he has a supportive government to back him. Also, an elected government will always need someone with whom it is on the same page to carry out its agenda. For the last few months, it was clear to everyone that despite the enormous respect Dr Rajan commanded, somehow the government felt that its agenda was not being carried out at the required pace. Also, despite the immense knowledge and talent Dr Rajan brought to the table, it is not as if an equally efficient person cannot be found for the position. The committee tasked with finding his successor should do so quickly and without bias, ignoring political pressures to find the most suitable person for the job.

What has rankled, and will perhaps hurt Dr Rajan no end, is the fact that he was hounded out for no fault of his own. Instead of letting loose the likes of Dr Subramaniam Swamy – who even questioned his patriotism – on the governor, the government should have quietly had a talk with the man and told him that he no longer fitted in its scheme of things. But this government has made it a habit of generating unnecessary controversy where none exists. While PM Modi is not realizing it, these controversies are giving his government a bad name and are taking the focus away from what he wants to achieve. As for the Congress, former finance minister P Chidambaram quipped that Modi did not deserve Rajan. Maybe he did not. Again, maybe Modi deserves a better RBI governor, a person who can fast track his government’s developmental agenda.