Suddenly everyone is interested in the functioning of the Reserve Bank of India and the steps it is taking to avert the fall of rupee from “grace”. News channels, newspaper , social media all writing column after column along with long spreads of photographs about the new man at the helm of the central bank and how he will save the economy from this never ending downward spiral. When was the last time you saw such long spreads of photographs of the Reserve Bank Governor? On closer analysis it turns out that the media is just smitten by Mr.Raghuram Rajan. Aptly termed as the “rockstar banker” Mr.Rajan comes with a formidable reputation.An alumnus of IIT Delhi and IIM Ahmedabad who went on to become the youngest chief economist at the IMF, he was amongst few economist(including Nouriel Roubini and others) who predicted the 2008 global financial crisis. Previously Mr.Rajan was chief economic advisor to the Indian government. Many believe that he was specifically brought in to head the central bank and it was decided that he should spend some time at Delhi and familiarize himself and understand the functioning of the political and governance structure in India before moving to Mint street.
Mr. Rajan has an unenviable task at hand. The former tiger economy is in bad shape with depreciating rupee, increasing CAD and general slowdown all over the economy compounded by a government which continuing its irresponsible inefficient welfare schemes and spending binge. It remains to be seen how Mr.Rajan known for his foresight and innovative thinking can change and reorient the thinking at the Reserve Bank of India and is able to solve the problems created by a fiscally irresponsible government and changing world economy with the monetary tools at his disposal.