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Raghuram Rajan's no to 2nd RBI term, says academia beckons him
Ending months of suspense, Reserve Bank of India (RBI) Governor Raghuram Govind Rajan formally told his colleagues on Saturday that he is not keen on a second term at the helm of the country's central bank and will return to academia when his tenure ends in September.
 
This was conveyed in a 888-word letter addressed to the RBI staff, a copy of which was obtained by IANS -- one in which he has listed what the central bank has managed to achieve in the past three years and what remains to be done, although that process has also been initiated.
 
Reflecting on his term as the 23rd governor of the central bank since September 2013 -- which has seen praise and also a fair share of criticism -- Rajan said the agenda pursued by his team was to help nurse India back on the path of recovery first, and then growth, and keep prices in check.
 
He went on to allude that much was accomplished, even as a part of that onerous task remained a work in progress -- while also indicating that he was ready to see that through as well, but eventually decided against it.
 
"While I was open to seeing these developments through, on due reflection, and after consultation with the government, I want to share with you that I will be returning to academia when my term as governor ends on September 4, 2016," he said.
 
"I will, of course, always be available to serve my country when needed," he added.
 
"I am an academic and I have always made it clear that my ultimate home is in the realm of ideas. The approaching end of my three year term, and of my leave at the University of Chicago, was therefore a good time to reflect on how much we had accomplished."
 
Stating that he will be returning to the US university, from where he is on a sabbatical, Rajan listed his unfinished agenda as seeing a monetary policy panel in place to broadly guide the central bank, and a clean-up of banks' balance sheets.
 
Listing the achievements, since the time India's growth was high and inflation also high when he took over, the governor said price control, improving foreign exchange reserves, currency stability, an eventual lowering of interest rates and extending a helping hand for reforms stood out.
 
He hoped the unfinished agenda for which the path had been paved will be pursued by his successor -- the 24th governor of the Reserve Bank -- again a matter of much debate and interest, with some names already doing the rounds. 
 
Much speculation had gone into a possible second term for Rajan, hailed by many as the best governor the central bank could have possibly had on its board during the difficult times India was going through, but also with some share of critics.
 
In fact, a petition that was floated online pushing for a second term for this IIT alumnus, had tens of thousands of netizens rooting for him, even as some critics like BJP leader Subramanian Swamy were particularly harsh towards him, asking Prime Minister Narendra Modi to let him go.
 
Both Modi and his Finance Minister Arun Jaitley remained silent all along.
 
But speculation gathered much momentum when Anandabazar Patrika, quoting sources close to Rajan, said in a report he was not interested in a second term, which got some credence when Modi said: "I don’t think this administrative subject should be an issue of interest to the media.”
 
Now that he has said no, RaghuramRajan is the hashtag trending at the top, mostly in his support.
 
Infosys co-founder N.R. Narayana Murthy, who has been batting, in fact, for not one but two more terms for Rajan, said: "Have no doubts he will continue to add value to the country. He deserves more dignity than what he was treated with."
 
Swamy remained unrelenting. "Raghuram Rajan was an employee of the Government of India. We don't select employees on the basis of popular vote -- and, too, of industrialists," he said.
 
Politicians seldom like someone outside their tribe shooting off his or her mouth. But a doctoral degree holder from the Massachusetts Institute of Technology, Rajan has always been outspoken -- often getting pushed onto the wrong side of a debate.
 
The latest being his remarks on India being the king in a land of the blind which did not go down well with many, particularly the BJP leadership and notably Commerce and Industry Minister Nirmala Sitharaman.
 
But Rajan, who has also served in the International Monetary Fund, has been used to such critics.
 
Before he shot to global fame with his prediction of a looming global financial crisis way back in 2005, he had to face ridicule from such luminaries as then Federal Reserve chief Alan Greenspan and Nobel laureate Paul Krugman.
 
He had the last laugh, so to say, when that became a reality. 
 
What had started as an academic paper titled "Has Financial Development Made the World Riskier?" also eventually resulted in an Academy Award-winning documentary called "Inside Job", bringing Rajan further into global limelight.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

Shirish Sadanand Shanbhag

11 months ago

Raghuram Rajan has joined as RBI Governor by taking three years' leave of absence from his professor's post from an American University. This leave if he extends further. he will lose his claim on his professor's post in American University, which he can enjoy for more than another five years, plus added pension from that University. When he was RBI Governor, he was visiting America, for 2 to 3 days for evern six months, to keep his Green Card in force. Therefore, it is Rajan's decision to quit RBI Governor's post after his 3 years' term gets completed.

REPLY

shadi katyal

In Reply to Shirish Sadanand Shanbhag 11 months ago

Evidently you are not aware of green card requirments and one does not have to show up every few months to keep it active. Beside he is on leave and thus can stay out as long his job is active here. Your claim that he will loose his job is a conjunture on your part. It is common in USA educational system for professors to take such leave when they are on foeign missions. Why are we bringing moot questions andnot the fact that he is leaving with his dignity and how can nation stand and let an honest r\true patriot be abused by thepeople like Swa my who lost his tenure in USA

Shirish Sadanand Shanbhag

In Reply to shadi katyal 11 months ago

I am an educationalist, and has a fair knowledge of lien on job in American Universities.
Therefore, I stand by my statement on RBI Governor Raghuraj Raman's decision, not to continue for second term.

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