In decades to come, people will look back on our decisions and actions. People including our children and grandchildren, who with the advantage of hindsight, will call us out on the wrong or misguided moves we would have made. In present times, all our options may look equally good or bad. In the future, no one will be as understanding.
2008 saw one of the worst recessions which went on to affect the entire world. From the United States of America to the Indian sub-continent, it made its presence felt across the world. Failing economies and struggling multi-nationals became the norm, with renowned brands finding themselves in critical financial territory and having to lay off staff from their business around the globe. At home, we remained comparatively insulated from the upheaval – only having to deal with symptoms like soaring prices for everyday foodstuffs and a dearth of new jobs in the market.
Enter Mr. Raghuram Rajan, a professor of Finance at University of Chicago Booth School of Business for 12 years and famous for having warned about the 2008 recession as early as 2005 (the US Treasury Secretary Lawrence Summers called them “misguided” at the time). The Indian Economy received him well; rising 333 points post his first speech as RBI Governor promising banking reforms.
Having highlighted the gravity of the problem of Non-Performing Assets in the banking sector, prioritising the tackling of inflation in the Indian economy and initiating the setting up of an independent Monetary Policy Committee to help sustain a path of lower inflation and a stable Rupee in order to boost investor confidence, Mr. Rajan has achieved a lot. His statements in the media, catching the limelight for being nearly political in nature, bring to attention the lack of forward vision which had been lacking in the Finance sector for many crucial years. With the recent changes, one can expect at least a modicum of forethought and long term planning in the fiscal policies of the country.
There are those who would say his refusal to budge to the ruling government’s interest is the reason for his not pursuing an extension or a second term. His comments on the difference of GDP calculations certainly did not win him any friends. The least we can hope is that the present administration is not as petty as to play with the long term financial stability of the nation for the sake of false hopes and mounting hidden threats in the market.
Ranveer Raj Bhatnagar