June 20, 2016

Time to Put the Rajan Affair Behind

Vivek Dehejia, Resident Senior Fellow at IDFC Institute writes in Mint on the exit of Reserve Bank of India Governor Raghuram Rajan.


Excerpts below.


"The hyperbole unleashed since the Saturday announcement that he’s not seeking a renewal to his term as Reserve Bank of India (RBI) governor has bordered on lunacy... Now, in the aftermath, we’re being treated to preposterous claims such as democracy has died, the middle class has lost its icon, the Modi government has made a grievous error from which it cannot recover, and so forth... First, and for the record, I believe that Rajan has been an able steward of India’s monetary policy and on this ground alone deserved to be re-appointed. Second, however, a central bank governor is not appointed with the goal that he uses his bully pulpit to be a free-wheeling public intellectual, lecturing Indians and the world on the follies of the government’s Make in India project, on the dangers of intolerance to our republic, and so forth. It is not just that it is beyond the remit of a central bank governor to speak outside the narrow topic of monetary and financial economics, and that too only as it concerns RBI business—it is that Rajan more or less directly criticized the government for which he was working. No democratically elected government will stand for such criticism from a technocrat within the bastion, as it were, beyond a certain point..."



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