He came in at a time when the rupee, in a free fall, had depreciated to 68.80. A year on, since taking charge as the Reserve Bank governor on September 4, Rajan has managed to stabilise the currency at 60-61and stayed focussed on his inflation targeting approach. Although Rajan, in his words is "not a James Bond," his feat is no less than that of 007 for which he has found many admirers. Here are some voices who admit the governor's accomplishment deserve a good rating on a scale of 1-10.
C Rangarajan, former chairman, PMEAC: Close to 10 out of 10. Rangarajan believes Rajan has done extremely well on the BoP and rupee front. He agrees with Rajan's approach that the dominant objective of monetary policy is price control.
Sajjid Chinoy, Chief India Economist, JP Morgan: A year ago, India was a founding member of the Fragile Five Club and today, we are becoming the darling among emerging markets, Chinoy said in an article published in Business Standard. Governor Rajan and the RBI have had a crucial role to play in facilitating that transition.
Sonal Varma, India Economist, Nomura Financial Advisory & Securities: 9-9.5 out of 10. Varma says Rajan deserves credit for creating nominal anchor and framework for monetary policy - on moderating inflation fast which is quite encouraging, which led to stability in the external sector, value of rupee.
Apart from that, Rajan's focus has also been on resolving some of the issues on the NPA side; governance structure of PSU banks, focus on financial inclusion, broader development of the financial market, dependence now on term auction rather than just overnight repo, LAF window ability. I think the macro stability that a lot of investors ascribe to India because of the government, but also because of these steps that the RBI has taken. To a good extent, it is because of Rajan's vision.
Duvvuri Subbarao, former governor, RBI: After Rajan completed 10 months, Subbarao said his successor Rajan deserves an "A+" grade for his performance. He in fact added, if there is anything beyond [A+], I would give it to him. He's been able to [apply] his scholarship of finance to practical situations. He's doing very well. "There's no doubt from his decisions and actions over the last 10 months he is doing what is right," he further said.
Taimur Baig, Chief Economist of India Global Markets Research at Deutsche Bank: Between 8 and 9. Baig says Rajan brought in all the right credentials, the one credential that no one knew whether he had or not was whether he was lucky and he has definitely been lucky. Had the taper tantrum continued through the fourth quarter of last year, India would have been in a far more difficult stage than it was right after the Governor’s arrival. However, since then whether it is the paper on inflation targeting or push towards financial inclusion or the sort of work that he has done to hold policy tight on one side but make sure the liquidity was not a problem, I think it has been a very good start to Rajan's tenure.
Posted By: Devika Ghosh
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
