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Last updated: 21 Jun, 2016  

RBI.Thmb.jpg Rajan's exit

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Bikky Khosla | 21 Jun, 2016
RBI Governor Raghuram Rajan last week announced that he would step down in September. The move sent shock waves through India Inc. Industry leaders agree unanimously on his contribution to the economy. When the former chief economist at IMF took office nearly three years ago, the economy was in a complete mess, with the rupee plunging, inflation rising and growth dwindling -- and today, we are in a far better position, with economic growth gaining pace and forex  reserves in good health. So, naturally the question is now in the air, "Will his discontinuation at the RBI be a loss to the country ?"

No doubt, things will go on without Rajan, but his departure can be a huge setback for reforms. In addition, what is disappointingly unacceptable is the disgraceful public campaign against him that preceded his decision. For some time now, the RBI Governor has been at the receiving end of criticism by some people  for his 'overemphasis' on inflation-control and 'slowness' to cut interest rates. Constructive criticism is always welcome, but unfortunately criticism by some government acolytes recently turned personal and surprisingly those in positions of power, instead of condemning it, preferred to remain silent.

In his letter to RBI employees, Rajan mentions about two major yet-to-be-completed tasks: formation of the new monetary policy committee and the still-ongoing bank clean up initiated under the Asset Quality Review. During the last three years, the central bank has taken a number of important steps to reform financial markets. Also, it is during this period Rajan made our banks accept the harsh reality of bad loans, making them wage war against willfully defaulting large corporates.  It will be interesting to see how the next RBI governor acts on these fronts.

The RBI governor has every right to decide whether he wants to continue with his job. We respect his decision. The Government also has the right to decide whether his tenure is extended. But the circumstances in which Rajan declared his decision raises disappointment. Some critics are claiming that this is another example of politics getting in the way of economic decision-making. Rajan may be the best man for the job, but he is too realistic to refuse the Centre's over-triumphalist view on the Indian economy; it did not go down well with the government, they argue.

I invite your opinions.
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Rajan must be given second term
prof subin | Sat Jun 25 18:54:03 2016
The govt must give a free hand to Rajan as second term RBI Governor. This will send bad signal to the financial world. Qualities must be counted than quantity. Now Modi must make his move very clear.

Raina's Exit
S. Arumugam | Sat Jun 25 06:29:57 2016
Politics is forced in the way of economic decision handled better by RBI Governor. There may be criticisms which should be polite and should not hurt others. Mr. Subramanian Swamy's (aggressive) comments are always wounding. He is out of control of BJP which should request him to maintain discipline.

Mr. Rajan is unfortunate.
shashi sekhar | Fri Jun 24 08:13:53 2016
Mr. Rajan exit is disappointment. After doing the good work he received only criticism. Whatever may be the disagreements between Modi government and him he did good for the people of India and truly need to appreciate. We need RBI governor who can question people like Mallya. I salute Rajan for this good work.

Shailesh Patel | Fri Jun 24 07:55:12 2016
While everyone loves Modi including me, I am an educated person and would want to apply my own mind. Mr. Rajan was definitely very intelligent man and I would say very courageous also to back his own decisions and not buckle down under political pressure unlike Manmohan Singh who also was very intelligent. I have had personal experience with RBI in last 6 months for the first time and believe as an ordinary citizen for the first time I was treated like a valuable customer and dignified citizen of India by RBI, which we are just not used to expecting from any government department in India. I received approval in less than 1 week during diwali week and during this 1 week I received calls from RBI, atleast 3-4 times to update me of the status of my application. At one time on Friday, the manager even waited till 7 pm when their official closure time is 6:00pm to receive a letter from my bank only to help me save 2 days of the week end. And all this royal service without any demand or expectations of under table money. Can you expect search services from any government department in India? Rajan wanted his department to function like government departments in western countries, but unfortunately, our political system is not yet ready for it. I have lost some respect for Mr. Modi for his decision to let him go.

Rajan's Exit
Saibal Saha | Fri Jun 24 04:31:55 2016
It is the Indian Constituency and periodical election system which is exactly the culprit for national parties to take such actions. While last Govt. has taken food for all types of dole that was actually for election though the then Prime Minister knew that. Indian people at last has got some sense for voting.Any step just to win election would not go well whatever propaganda is to be made. People perception has elevated as seen in last several elections.

Political decision
Kunnakkattu J | Fri Jun 24 02:08:08 2016
Many made comments on Swamy stating that he never make statements without evidence. In this case of criticizing RR he had no evidence instead a mere prescription on RRs patriotism. No Gov in the past had been faced such criticism in the past. Actually speaking this process of criticism should have come before or immediately after his appointment. This means that there's political wave behind this move. Proof: In the case of RR no political bosses came with protecting or siding RR unlike in the case of Arvind Subramiam. Anyway this is not a good precedence. Appoint person in key post after thorough scrutiny on his political ideology. Don't do the character assassination, which all political parties are interested. Let us see what new Guv do more than what RR intended to do? Did Swamy want to reduce interst rate to 1 or 2% like in USA? Then he is wrong. India is the place with very high direct and indirect taxes that all due to politicians fund mismanagement. Why MPs& MLAs demand high wage & perquisites when there is no good roads, no proper food for 60% of population? No infrastructure for education? When no doctors and medicine available to the voters who made them MPs and MLAs? Jawab Do

Rajan's departure
Pradipta Kumar Purohit | Fri Jun 24 00:53:37 2016
Mr Rajan has to complete one task before departure is to reveal the correct NPA position of the banks so that the government shall initiate some policies to ensure recovery of the loans. Present regulations are not being effective to promote prompt recovery of the loans. The government reports on kcc loan disbursements are just the better name of utter lie. In pen and paper loan is disbursed but in the real sense it is just the renewal of the last loan. Farmers suffer because of the wrong policy of the government. The data of lending to new farmers can tell the performance of the banks in the country.

VINESH ARON | Thu Jun 23 16:14:49 2016
It is very sad that he has been treated very badly by the corporate and political lobby. These corporate and politicians will digest all the money of innocent Indian who have deposited all their savings in the bank, which is going to be transferred to the corrupt people as banks bad loan. Now I think people should not deposit their hard earned money in any Bank.

Sad day for indian economics
Deepak patel | Thu Jun 23 14:46:26 2016
Rajan is the best there is no alternative of raghuram rajan i deeply criticise govt. Action against him however on public interest he should not leave the job for well being of India what ever other dirty politician say!

Prasenjit Das | Thu Jun 23 14:18:56 2016
Dr. Rajan was the best man for the job. May be he was too good for over politicised Indian system.

RBIGovernor -RRR
M B Raman | Thu Jun 23 11:38:30 2016
It is really disappointing. We will soon have repurcussions.It is not a story;but real thing on ground.We shouldn't have dis-honoured him.There is really a economical growth and banks started becoming serious about NPAs

Big political game of indian economic
REHMATULLAH GHA GHA | Thu Jun 23 09:57:07 2016
Do not see his personality try to get in touch with his ability to work and generate the revenue from mess HIS exit is totally a political handiwork. ...The current pm doesn't have any knowledge of Indian economic growth. .....simply concentrating on some lethargic issues of India Such as black money

Rajan's Exit
Chandrasekharan Nambiar K | Thu Jun 23 07:51:35 2016
We should not be wasting our time and money to find out WHO IS RIGHT and WHO IS WRONG. It is for the Persons at the helm of affairs including our dynamic PM to spend time and find out WHAT IS RIGHT for our economy and engage qualified hands to set the system RIGHT for overall development in the best interest of our nation. Needless to mention here, finding fault with anybody is silly and stupidity as we are not going to gain anything in that process. People who are indulging in senseless criticisms should be isolated and condemned. Mr.Rajan deserve all appreciation to whatever he has done in his capacity and whomsoever trying to belittle him have their own valid reasons, which are not very important for the country in general.

Rajans EXIT
C M GUPTA | Thu Jun 23 05:19:15 2016
Media should not indulge in administrative matters.Media persons are trained to criticize only.They do not have any concrete policy.During congress regime they were afraid to comment on such issues.Why they are commenting now?

sarat kumar | Thu Jun 23 04:26:09 2016
I curse these politicians who thinks they know everything and act in a manner ultimately hurts the country. I will ask one thing. If country suffers badly shouldn't these people like PM FM & Subramaniam Swamy be held accountable and put behind bar for their action

Rajiv Aggarwal | Thu Jun 23 03:53:23 2016
I am very sad at the decision of the Government to let a good guy go. Time and again it is proven that success hinges on a team with great team members. A good CEO first finds the best guys and creates a great team. To have a good guy and to let him go is unpardonable act for a CEO. Dissent is always good and should be managed with internal dialogue. To fire a guy because he says things that make you uncomfortable, is not the hallmark of a great leader. I am sorry Mr. Modi, you have lost my respect for you. I voted for you, but am not sure if I will do this again.

Rajans Exit
Mayank | Thu Jun 23 02:06:45 2016
Plz dont work on congress Agenda to propogate each and every political decision..congress needs to decide whether economic condition was good or bad in their regime..earlier they were saying it in good shape they are saying in bad shape...let government do there job at least for 5 years...when India can tolerate 60 years of congress its just 2 don't try to make fool public..we have faith in Modi

inflation and rupee's strength
pradip parekh | Wed Jun 22 18:50:58 2016
RBI governor Rajan is primarily applauded in the media for inflation control and structural reforms of the banks. if you study the economic history of india over the past decades, what clearly stands out is during all these decades the inflation rate HAS BEEN very high despite the interest rates being also very high. in other words, high interest rate had little bearing on inflation - in india, that is. so, what's now different since modi govt took over? what's different is this : the inflation rate is going down, and now is very low; low as in close to zero. that's really a huge huge huge performance by the modi govt, bringing in extensive structural and market reforms, and securing the supply side. such rapid results do not come from rbi's monetary adjustments because they take a good deal of time to work through the economy. of course, mr. rajan did indeed cut the interest rate a few notches IN RESPONSE TO THE ACHIEVED targets by modi govt. in fact, it was rajan's pre-condition that he would lower the interest rates only if modi govt achieved low inflation, and the modi govt did indeed achieve it so mr. rajan could lower the interest rate. so, let's get this part right, shall we? dr. rajan held the goi's feet to the fire, goi delivered, and all are, or should be, happy, right? however, the story is bigger. dr. s swamy's charges are harsh, could have been more diplomatic because they are not baseless. i am one of those who feel rajan was behind the curve.

Rajan Exit
Kirtikumar J Shah | Wed Jun 22 17:27:18 2016
It is okay for Rajan to leave gracefully so fresh new ideas can be tried. In fact, this post should not be occupied for indefinite period and it should always end when current government in Center has come to med term so the post does not become political issue. Money mixed with politics is always a bad mixture and generally equals to corruption.

Politics vs Economics
Jasketan | Wed Jun 22 17:10:27 2016
Its a disastrous win of bad politics over Economics.Before we point out 1 finger to someone else 3 fingers are already pointed towards us. Look west policies doesn't always work .We should work for make for India rather make in India policies. God bless.Thanks all.

Exit of Raghuram Rajan
Sharma J B | Wed Jun 22 13:01:26 2016
Mr Rajan has done a good job of shaking and cleansing the system. Even if his approach was not in line with the government in power he deserved a graceful exit.

PARVEZ BHARUCHA | Wed Jun 22 12:33:30 2016
It is very disappointing and disheartening to know that India will lose such a brilliant man. A man of his stature and calibre comes along once in a century and blessed are the countries who have such people . India was one such blessed country but Government as usual has other ideas . He should have been persuaded to do second term at any cost. Any other country would roll out the red carpet for him because of his brilliance but unfortunately our political babus are stupid, selfish and downright ignorant. His achievements are for anybody to see and yet these babus, because of their own personal agendas could not hold him in office for another term. I am personally very dispappointed and actually worry about BJP's appointee . Our PM is an excellent marketing man but a very poor administrator. Running a state and running a country successfully are two different ball games. Who will fill Mr.Rajan's size 12 shoes ???? Your guess is as good as mine. Best of Luck India.....

Rajan's Exit
Nitin | Wed Jun 22 11:28:41 2016
Indian economy was showing growth by printing money and spending it to show growth. This cannot last forever as it was driving Rupee lower each day. Rajan was trying to enforce actual growth with more industry growth and curbing bad debts by public sector banks. He was able to keep Rupee stable if not growing stronger. His strategy for growth might not be acceptable to the corrupt politicians. His exit is surely a step backward in economic reforms.

cheap money and what it accomplishes
U.S. Expat Manufacturing in India for 17 years | Wed Jun 22 10:40:58 2016
take a lesson from the rest of the world...keep rates challengingly high. when cost of money falls, consumer savings rates go down, consumer debt goes up, bubbles are created and the only ones in the end that win are the bankers. healthy business models don't need cheap money to thrive.

VINIT GOYAL | Wed Jun 22 06:30:53 2016

Rajan's exit
v k gupta | Wed Jun 22 06:03:56 2016
Nobody is indispensable . Nevertheless , his exit is unfortunate . He has played glorious innings . We all would have loved him to continue except for few over jealous ... Let's hope for better times under new RBI Governor . Everybody appreciates & has confidence in PM Modi .

  Re: Rajan's exit
K.Chandrasekharan Nambiar, Chennai-42. | Fri Jun 24 06:43:08 2016
| Fri Jun 24 06:38:18 2016 We should not be wasting our time to find out WHO IS RIGHT and WHO IS WRONG. Instead, persons at the helm of affairs including our dynamic PM must engage themselves to find out WHAT IS RIGHT and initiate action to set appropriate policy and systems in the best interest of our nation's economic development in the given circumstances. Mr.Rajan has done his part of the job to the best of his ability during his tenure and those who are engaged in mudslinging are not important as they have no role to play to our country's development. Ignore their comments with the contempt it deserves and devote time to look at constructive criticisms.

R3 Exit - Good for indian Economy
Rohit | Wed Jun 22 05:11:19 2016
R3 exit is actually good for indian economy for long run He is the sole responsible of supporting/closing eyes on crony capitalism like V. Mallya and other big industries, resulting huge fund availability for big Industries whose contribution in GDP is only 30 to 35% (May be lesser) and closed eyes on increase of NPAs in banking sector due to that. Destroyed SMEs and common man due to higher interest rates, which jeopardise the SMEs afftected job creation.Need to note that India's 85% job providers are these SMEs. Higher Inflation is worst than joblessness MMS and his adviser R3 killed indian manufacturing and focused over Service Industry like IT & IETS,which is far more volatile that manufacturing because it is dependent on other countries economy.They ignored biggest indian consumer market for manufactured Items. Lack of made in india consumable products in market actually helped draining of our Money to Foreign companies. they boasted themselves to increase in funds in form of Taxes applied to those products which is a peanut in comparison of the amount indian consumer paid for the product either imported or assembled here Inflation went down not because of R3 which is being claimed as his best credentials, it went down along with the price of Crude Oil prices So R3 MMS and Chidu destroyed Indian economy in last 10 years, Together. Only those are wailing and mourning who were the actual beneficiaries of such crony policies

Kush Mahani | Wed Jun 22 04:53:03 2016
When Narendra Modi along with his PMO is taking many sound strategic decisions, why is he not supporting Rajan ? There must be some hidden aspects we all are unaware of, otherwise I doubt why Modi and even Jaitley won't support Rajan.

Rajan's Exit Good For India
Ananthanarayanan | Wed Jun 22 04:38:46 2016
Indeed Mr Rajan is an astute economist with tremendous respect across the World. But the sad part here is that Rajan is an Indian and did all his basic studies up to IIM in India and after which only he left to the US to pursue his further interests. One thing to be noted here is for all his sheer brilliance and knowledge I am not sure whether all about his own country, if at all he considers India one so. Unlike the US and the other developed nations Indian economy is a very complex one. In India trade and business happens in many ways viz: accounted and unaccounted. Perhaps unaccounted may be more in terms of value compared to the accounted. This is due to certain business segments in India can be done only that way. There is nothing wrong in carrying out business that way but if it is detrimental to the country's economy such process have to be clearly understood and rectified and smoothened. Here is where Mr Rajan failed. Even he is born and bought up in India, though he choose another country for his own reasons, he should have studied his own country well by travelling, interacting and understanding the complexities of business here. After all it is RBI which plays a vital role in defining the country's economic and financial policies. Mr Rajan could have come out with good process system in tackling the porblems being faced today by the businessmen in this country. Setting up of MUDRA bank could have solved many of the problems. So he could have done still better

Rajan's Exit
Sapna | Wed Jun 22 04:34:09 2016
I truly agree that it is a very unceremonious exit . Unfortunately those who do well at work and contribute to the upliftment of the organization / area of work assigned to them always attract a lot of raised eyebrows from those who are just not capable of doing quality work but are very capable of launching a silent & vicious campaign to oust those Karm yogis . Sadly these elements are usually successful because we all love to back bite . It is only after the exit that we start the process of lamenting and saying that the person was so good. The hurt and hatred we brew up unmindlessly can be so dis heartening to those who had put in their best . Probably we cannot change the whole world or the way we think but what we can do is that we vest the decision making power in those who are at a much higher state of maturity to not listen and give into malicious maligning

Rajan's selfless services
Rupalkumar Buch | Wed Jun 22 04:18:46 2016
Our bad, because of a few politicians, though we are being one of the largest democratic countries in the world, not able to take Mr Rajan's selfless services for longer time!!

rajan should conti...
Indian | Wed Jun 22 04:05:32 2016
He is the best man who run RBI well in last tenure. so he should continue his post. this is the opinion of Indian economy.

Rajan's exit
Shweta | Wed Jun 22 03:58:44 2016
I think you article is completely one sided and not balanced. Rajan was not forced to leave, he voluntarily wanted to return to academicia, we should put the faith in the successor. As such rajans' contribution to economy was not very successful, in fact i would call it conservative approach.

subramaniam Swamy is good for nothing
Poopathi Mudaliyar | Wed Jun 22 01:26:07 2016
Subramaniam Swamy is a mess. He has no control on his tongue. He is good for gossips but not good for the country. Fools rule and intelligent quit. That is fate of our country. Shame on such country destroying politics.

Rajan's Exit
Vipin | Tue Jun 21 15:49:18 2016
The layman solution is to make criticizing & campaigning people responsible for suggesting solution & corrective action within stipulated period, in absence of which those shall be considered as anti-nationals & punished accordingly.

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