RBI Governor Raghuram Rajan has been quite in the news lately as his term is coming to an end soon. While several leaders chose to hurl dirt at him, many came forward in his defence, Rajan, however, maintained a quiet and dignified stand, dropping the bomb at the last minute saying he chooses to return to his old teaching job at the University of Chicago.
The chief's "Message to RBI Staff" announcing his departure even took the government by surprise as top finance ministry officials seemed clueless at least a few hours before the announcement. While the real reason behind the decision is unknown, indications are that he was open to serving as governor for the next two years, but wanted an early signal from the Prime Minister and Finance Minister as to whether they wanted to retain him. As the assurance did not materialise, Rajan decided to exercise his option to return to academia, instead of hanging in for a confirmation.
Rajan had written and spoken at length on the dangers of crony capitalism, and made quite the number of enemies after he declared war on bad loans, forcing banks to declare massive losses and turning the screws on business groups that had grown by not repaying banks. "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... I will, of course, always be available to serve my country when needed," said Rajan in his notice. A couple of hours after the announcement, Finance Minister Arun Jaitley tweeted, "The government appreciates the good work done by him and respects his decision. A decision on his successor will be announced shortly."
Rajan was appointed by the previous UPA government for a three-year term that began on September 4, 2013. He has been under attack from some quarters in the BJP, including its Rajya Sabha MP Subramanian Swamy, for what they say his failure to lower interest rates and boost economic growth. He has a formidable reputation as an internationally renowned economist and is still being hailed all over the world for accurately predicting the 2008 global meltdown. No RBI governor before him enjoyed a celebrity status like he does. His words on the economy are taken very seriously in the West.
