Raghuram Rajan’s departure shocks industry, “capitalism lost, cronies won”

By
JKR Staff
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Reserve Bank of India (RBI) Governor Raghuram Rajan Saturday ruled out the possibility of a second term as widely speculated in the media.

The RBI posted Rajan’s message to his staff on the website.

The message said, “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. While all of what we laid out on that first day is done, two subsequent developments are yet to be completed. Inflation is in the target zone, but the monetary policy committee that will set policy has yet to be formed. Moreover, the bank clean up initiated under the Asset Quality Review, having already brought more credibility to bank balance sheets, is still ongoing. International developments also pose some risks in the short term.

“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.”

Also Read | Raghuram Rajan’s message to RBI staff on not accepting second term

This announcement has evoked sharp reactions from the industry, which appeared unanimous in its conclusion that his departure will be a huge setback for India.

Meanwhile, the BJP’s Rajya Sabha MP, Subramanian Swamy said that it was time for Rajan say good bye.

He tweeted, “R3(Raghuram Rajan) has said he will go back to US. Whatever figleaf he wants for hiding the reality we should not grudge it. Say good bye!”

In his subsequent tweet, Swamy praised Modi for not bending to the pressure of ‘media’ and ‘industrialists.’

He said, “My admiration for Namo has gone up hugely. Media, industrialists, and international bureaucrats piled on him for R3, but he did not bend”

Swamy’s tweet implied that PM Modi had refused the second term to Rajan.

Swamy had written two letters to Modi asking him to sack the popular RBI Governor because, according to him, he was mentally ‘not fully Indian.’

India Inc, political leaders and social media users, though, reacted sharply calling Rajan’s decision as a loss for India.

Here are some of thw notable reactions:

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