Amongst them is, when he took office as the 23rd Reserve Bank of India Governor in 2014, India was amongst the Fragile Five countries. Today, it is the fastest growing economy in the world at a time when the countries worldover are slowing.
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In the TV interviews, Rajan was also asked about the personal attacks on him, especially by BJP MP Subramanian Swamy.
Responding to a ques tion on what would have kept him back, Rajan said “There was a process of dialogue with the government and dialogue eventually didn’t reach a place where we could agree that I would stay on”.
“Whenever we’ve had to said no, I’m not anxious about criticism or a job in (the) government”. He said, “Whenever we’ve had to say “no”, I was never anxious about re-appointment or future prospects”. “Some of the collateral benefits over and above low inflation will be a currency that is not depreciating constantly, higher real returns earned by savers, and lower nominal interest rates, including inflation risk premia, paid by borrowers”, said Rajan.
“For me, it was stability first”. I think we should expect them to take an independent decision. Speaking on the weakening of the governor’s position after the creation of the monetary policy, Rajan said if the governor has enough credibility within the RBI, he or she can still drive policy.
The much admired former International Monetary Fund chief economist is due to step down on September 4 after a three-year term to return to academia and family living in the United States. “I’m an academician, I don’t want to be a career diplomat or a bureaucrat”.
He said after three-and-a-half years at International Monetary Fund and four years in India, he did not want to label himself as a career bureaucrat, or a career technocrat. “Everything I wanted to do was structured for three years”.
In an interaction with television channels, Rajan said the asset portfolios of such NBFCs must be treated on a par of those of banks. “I was open for staying a little while longer to see them complete, but at the same time I was perfectly happy to go”. “That does not mean in any way, that I was absolutely hell-bent on having a second term”. The other two members are the RBI governor (who will be the ex officio chairperson), and deputy governor in charge of monetary policy, who is now Urjit Patel.
“These are perfectly legitimate speeches”. Rajan is on leave from his job as a professor at the Chicago Booth School of Business.
“RBI is supposed to be an entity that is conservative, with long term vision and focus on stability. I’m very open to reforms but as far as stability goes I’ve been very conservative, I’ve always said, let’s call a spade a spade, and not get overtly enthusiastic”, he said.
Rajan said, in the three years, “I have had absolute freedom in what I wanted to do. I’ve had great relationship with the old government and the people who matter now”.
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He said, “There are some things that remain unfinished but my sense is 90-95 percent of what I wanted to do both in that opening statement and that have emerged after that are done as initiatives where you need to set structures, ideas have to creep in etc”.
