Capitalism, or more precisely, the free market system, is the most effective way to organise production and distribution that human beings have found – Raghuram RajanName : Raghuram Govind Rajan
Occupation : 23rd Governor of Reserve Bank of India
DOB : 03 Feb 1963
Birth Place : Bhopal, Madhya Pradesh , India
Nationality : Indian
Wife : Radhika Puri Rajan
Education : MIT Sloan School of Management
Raghuram Rajan who is more popularly known as ‘Rockstar Rajan’ was the 23rd Governor of RBI(Reserve Bank of India).
A successful and goal oriented professional, Rajan completed his schooling from some of the best educational institutions in the country and abroad. He has gone to IIT-Delhi for graduation and IIM-A for post graduation and his thesis ‘Essays on Banking’ gave him Doctorate (Ph.D. in management) from MIT Sloan School of Management. He was and is always a great predictor and a well versed economist as well. He served 1st half for Reserve Bank of India but he announced that he will not serving a second term in RBI. His clear vision oriented and practical approach has been crucial in fighting the INFLATION which affected the nation adversely when he assumed the role of RBI Governor. Initially he was been trolled and criticized but later he got commended and recognized for predicting the US economic crisis of 2008 beforehand. He has given his analysis of the global economies in 2005 only, in a paper titled ‘Has Financial Development Made the World Riskier?’ Initially this issue has got much criticism but later after looking at the downfall in the international market, many of them started concurring with his views. The paper attracted much criticism at the time but the eventual downturn in the international markets made many concur with his views. In his book ‘Saving Capitalism from the Capitalists’ he suggests:
“Capitalism, or more precisely, the free market system, is the most effective way to organise production and distribution that human beings have found … healthy and competitive financial markets are an extraordinarily effective tool in spreading opportunity and fighting poverty. …Without vibrant, innovative financial markets, economies would ossify and decline.”
Mr. Rajan has really made very crucial and important contributions in the field of economics. He has been recognized and cemented his position among some top most economists of his and our times when he got corrected in judging the economic crises in United State of America and later in Europe during 2008 to 2012.
While his first speech as RBI governor, he promised banking reforms and eased curbs on foreign banking, which actually given BSE an addition of 333 points or 1.83%. Even rupee rose 2.1% against the US dollar.
As Governor of the RBI, he made sure that inflation is his primary focus and the same can be seen and understood by looking at retail inflation of 9.8% in Sep 2013 to 3.78% in July 2015. This has been the lowest retail inflation since the 1990s era.
Not only retail inflation but he has also shown tremendous correction/change in the wholesale inflation. It came down from 6.1% in Sep 2013 to an unimaginable figure of -4.5% in July 2015. Wholesale inflation came down from 6.1% in September 2013 to a historic low of -4.05% in July 2015. Even when government was recommending otherwise, he went with the global norm and made RBI to adopt CPI (consumer price index) as the key indicator of inflation.
Foreign exchange reserves of India have also grown very positively i.e. by about 30% to the tune of $380 billion in those two years.
Looks like, the RBI has seriously looked over extending banking services to those 2/3rd population who were still away from banking facilities; by giving license to two universal banks and by approving eleven payment banks.
He has won awards/recognition as one of the best central bank governors worldwide in 2015.
On 18 June 2016, Mr. Rajan announced that he will not be serving the second term as RBI Governor. In September 2016, Urjit patel appointed as new RBI governor of India
Raghuram Rajan warned about the growing risks in the financial system and proposed demonetization system by central government. But that time, nobody taken his statement on serious note. Today’s the result time, all of we can see. Rajan clearly mentioned about this in his book ‘I Do What I Do‘.
After Prime Minister Narendra Modi announced the demonetization program in November 2016, India’s GDP slowed to 6.1 percent in the first quarter and 5.7 percent in the subsequent three months.
Several of Rajan’s opinion editorials :-
Now the world best banker prize winner ‘Raghuram Rajan’ is on the list of probables nobel prize winner in category of economics.
- Building Stability for Indian Growth (May 10,2016)
“ We must also address banks’ non-performing loans so that their balance sheets have room for new lending. using some “out-of-court resolution” mechanisms devised by the RBI, and with capital support from the government, banks should have well-provisioned balance sheets by March 2017. Perhaps the hardest challenge has been to persuade the public, impatient for rapid growth, of the need to ensure stability first. The task is to build on this base. For the first time in decades, global trade has grown more slowly than global output.” Read More
2. New Rules for the Monetary Game (March 21,2016)
“Our world is facing an increasingly dangerous situation. Both advanced and emerging economies need to grow in order to ease domestic political tensions. And yet few are. If governments respond by enacting policies that divert growth from other countries, this “beggar my neighbor” tactic will simply foster instability elsewhere. What we need, therefore, are new rules of the game.Politicians know that structural reforms – to increase competition, foster innovation, and drive institutional change – are the way to tackle structural impediments to growth. But they know that, while the pain from reform is immediate, gains are typically delayed and their beneficiaries uncertain.” Read More
3. Central Bankers on the Ground (June 27, 2013)
“Markets are in turmoil once again, following the US Federal Reserve’s indication that it might reduce its bond purchases toward the end of the year. Perhaps Winston Churchill might have mused about quantitative easing, “Never in the field of economic policy has so much been spent, with so little evidence, by so few.” The intensity of the market reaction was surprising, at least given the received wisdom about how the Fed’s quantitative-easing policy works. “ Read More
4. The Case for India(September 13, 2013)
“India does have serious problems. Annual GDP growth slowed significantly in the last quarter, to 4.4%, consumer price inflation is high, and the current-account and budget deficits last year were too large. “ Read More
For More Opinions visit hereBOOKS he wrote I Do What I Do Book publisher- Harper Collins India , published on September 2017. Book increased attention because of Rajan’s view on economy and Indian political views in a respected manner. Another thing is Raghuram Rajan’s view on Demonetization and crises. Fault Lines: How Hidden Fractures Still Threaten the World Economy Princeton University Press, May 2010. Winner of Financial Times/Goldman Sachs Business Book of the Year Award. Saving Capitalism from the Capitalists with Luigi Zingales, February 2003, Crown Business Division of Random House AWARDS AND HONORS: