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Wednesday, 22 June 2016


He is one of the very few central bankers discussed not only in corporate boardrooms, bank headquarters but also in dinning halls and coffee shops across the world. Though the media has made his non extension a major issue, did he really need it? He has already accomplished in the last three years, what might have taken others five or six. After 1990, he is the second RBI Governor whose term has not been extended. With so many theories floating about his decision to quit, it would be unwise to believe what our political pundits want us to believe. I think the major bone of contention between RBI Governor and North Block was inflation v/s growth, the rest was just froth which added the unnecessary mystification to the whole episode. And it happens everywhere with central governments chasing growth and central bankers curtailing inflation. So nothing is new, history has just repeated itself after three years when the then Prime Minister had vowed in media that the government is ready to walk all alone.

So we just have to move on, there is so much to look forward to from Brexit to FED to ECB and then China. I don’t think we have time to brood and weave new theories to enthrall both foreign investors and media. Whatever might be the case, Dr Rajan will always be remembered as someone who shook the bureaucratic system, upset the capitalists and flogged the bankers after every rate cut. He also made the government extend Swachh Bharat Abhiyaan to banking sector and unleashed financial inclusion era by giving out small and payment bank licenses. This list can go on…..  

On 20th June, FDI reforms announced by the NDA government might be considered astute by some political analysts, but it makes one thing very clear, Indian reform process will be fast-tracked at every impediment whether it is opposition to GST or Rexit. As for Mr. Rajan after resignation also he was able to influence government policy, if not the content, then at least the timing.

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