Dr. Raghuram Rajan leaving the RBI on completion of his tenure at a time when a turbulent global economy poses several risks to India along with the banks wrestling with an unprecedented challenge of mounting non-performing assets is quite unfortunate. Dr Rajan is one of the finest economists India has ever had at the policy making level. Over the last three years, he provided a new dimension to entire approach of the central bank with a global perspective, yet keeping intact, the unique advantages of the Indian economy and eco system. He took the battle against inflation to the next level by targeting consumer price inflation rather than wholesale price inflation, which has traditionally been the benchmark for the RBI. This was one of the important recommendations of the Dr. Urjit Patel Committee that he constituted on his first day in office and a key reform measure that he accomplished within a few months of assuming office.
Dr. Rajan also managed to make the process of handing out new bank licenses transparent and controversy-free, though he is still far from redeeming his initial promise of licenses on tap. He always looked promising with an ability to achieve and contain inflation. He has certainly played a key role in making sure that India as an economy finds lot of acceptance from global investors. No doubt, his successor Dr. Urjit Patel who was seen as a close lieutenant to Rajan and had headed a committee that introduced landmark changes in the monetary policy formulation of the central bank will certainly carry forward all the unconventional measures that he has initiated and it is not an easy task. India needs a leader like Dr. Rajan who takes the challenges. Good bye Dr. Rajan – You are a rockstar.
Vinod C. Dixit
(The views expressed by the author in the article are his/her own.)