Raghuram Rajan’s three ¬year tenure ends today. His term was marked with numerous controversies and success stories. He was given many titles like 'Rockstar Rajan' and 'Bond of Mint Street' for his persona, he once remarked "My name is Rajan and I do what I do" in a much like Bond style. While he had fans he had his share of critics reason why his tenure was cut short at three years ¬the lowest for any RBI Governor in a long time. Outspoken as he has been with his views, 53¬year ¬old Rajan went on to make public that he was willing to stay longer but an "agreement" could not be reached with the government in this regard. Rajan, who is credited with predicting the global economic crisis of 2008 and has decided to return to academia, said he would be back with his public speeches in India after a break, while making a strong pitch for retaining RBI's autonomy and allowing it to say "no" to the government whenever required. While he is expected to resume his job as Professor of
Finance at Chicago University, from where he has been on leave, those in the know say that he may also take up some other assignments in due course, including in academics.
Rajan’s three years at the
Reserve Bank has mostly been a string of success stories. While he gained common man's adulation but in the process he made a few foes in the corridors of power which prevented him from getting an extension. One of the most salient features of his reign has been a stable rupee, which was the biggest challenge when he took over on September 4, 2013. Not only has Rajan brought the bleeding rupee back to strength, he also battered down the inflation fangs to 6 per cent from double¬ digit levels, leading to a cheer in fixed income markets with falling yields. During his three years, Rajan has made classic use of public speeches to drive different concerns going beyond conventional monetary economics, cementing his position as one of the foremost public intellectuals in recent times.
Experts say his biggest legacy would be steering the economy out of what seemed like a never¬ ending crisis ¬¬ with a bleeding rupee, unsustainably high CAD and precarious external position ¬¬ and then creating a framework through cleaning banks' books, market liberalisation and putting bank licensing on¬tap, which will all go a long way to make a conducive environment for the next wave of growth. Under Rajan, the RBI undertook an asset quality review of banks by issuing blanket orders to classify loans to certain accounts as nonperforming assets. The provisions led to record losses by lenders and Rajan set them a deadline of March 2017 to get done with the clean¬up act. Under Rajan, the RBI reached a historic agreement with the government to become an inflation ¬targeting central bank under which the MPC has been envisaged to make interest rate setting a collective call, rather than being driven by the Governor. This makes him the last governor to have the privilege of setting the monetary policy on his own.
