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Will the Reserve Bank of India have a new Governor in September? It may well, going by a report in the Kolkata-based Ananda Bazar Patrika , which claimed that Raghuram Rajan had written to Prime Minister Narendra Modi, asking to be relieved when his three-year term ends.
The report, quoting unnamed sources, said Rajan would like to join an American university and pursue research on India’s economy. The report also said the PM was keen on a second term for Rajan.
PTI quotes a top Finance Ministry official as saying that there has been no discussion on whether or not Rajan will get an extension, and a decision will only be taken closer to when his tenure ends.
Rajan has been the target of a personal attack by Subramanian Swamy of the BJP, who was recently nominated to the Rajya Sabha. Only recently in an interview to a foreign publication, Modi said the RBI Governor’s appointment was not a matter for media discussions, while Finance Minister Arun Jaitley has been quoted as saying that he was against any personal attack on Rajan.
Rajan, who turned 53 in February, is an alumnus of IIT-Delhi and IIM-Ahmedabad and obtained a PhD from MIT’s Sloan School of Management. He was Chief Economic Advisor to the Finance Ministry before he took charge as the RBI’s 23rd Governor on September 4, 2013. He was also a former Chief Economist of the International Monetary Fund. In 2005, he warned of an impending global financial crisis long before the meltdown of 2008.
An appointee of the UPA Government, Rajan has had a blow-hot, blow-cold relationship with the NDA Government, with a few ministers publicly ticking him off for his recent observation on the economy.
Rajan has not responded to any of the criticisms. Stories circulating in Mumbai suggested that Rajan had more or less decided to pack his bags and go back to the US, as his family had already left. Rajan, who was confronted with a falling rupee when he took over as Governor, not only steadied the currency but also has fought hard to rein in inflation (see graphic). It was he who asked all banks to clean up their balance sheets and rid them of non-performing assets, something the State-owned banks were quite willing to sweep under the carpet.
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