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| Dr. Raghuram Govind Rajan RBI governor |
About him : Raghuram Rajan is the 23rd governor of the RBI (Reserve bank of India). Earlier in September,13 he was appointed on this post for a span of 3 years, which is going to complete in September,16. This was his second assignment in India, earlier he was appointed the chief economic adviser to the UPA govt. for almost one year. Before coming to India he was economic counselor and director of research at IMF (international monetary funds) from 2003 to 2007. You can find his detailed CV here.
The major reason of the fact ' he is called james bond of world economy' is the presentation in which he predicted that global economy was at risk of a collapse. Few took him seriously, until in 2008, when the global meltdown began and was triggered by the very factors that Rajan had predicted. Ever since, he has earned worldwide respect as an economist with deep understanding of global monetary system.
When Dr. Rajan took over this post from D. Subbarao , he had major challanges at hand like- the economy was at its lowest point in over a decade, the rupee had weakened to record levels- depreciating 11% that year, FIIs were pulling out money, FDI was becoming scarce, and worst of all investor confidence in the the UPA govt. was at its lowest. But he has been trying since his appointment to make the situation better. Though it has not been smooth sailing all the way, despite intense political pressure, he has been able to maintain RBI's autonomy and functioning. The best proof of success of Dr. Rajan's policies, especially during the NDA regime is the fact that GDP in the last quarter has grown up by 6.9%. Here are some of his policies which make him a successful personality:
1.Lean on predecessors and strong team mates:
A good leader is as good as his team. RGR co-opts not just the present but also past achievers to support him in his (grand) endeavour. An outsider to the system, RGR knows he cannot navigate it alone. Calling on colleagues within the RBI, setting up committees with known and respected thinkers and doers to lead them, RGR already has a program in place even before he starts work. This is what the starting block must look like, and RGR shows that he and his team mean business. He leans on the shoulders of giants, shepherding them to his vision while giving them their space and the respect due to their previous achievements. As with every good team, they will hold him up, and if they fall, they fall together. With so many of them supporting different parts of his vision, something has to go right at every point of time. The lessons of a diversified portfolio are well applied here.
2.Think straight- details and people:
Professor Rajan’s key strength is his analytical ability. There are three levels at which one can analyse issues - the country, the company and the individual. Within his mandate, RGR speaks to all three, creating a matrix with the issues and their impact on these levels. Having analysed them, with typical clarity he zones in to the top three problems and highlights them. Inclusion is key. With a large portion of the system unbanked, and another chunk in the grey market, the impact of the RBI is limited. For his policies to work, he needs to be able to reach those who churn and multiply the rupee. He states that as a priority.
3.Acknowledge the tough choices but not dwell on them:
RGR does not shy from speaking of the elephant on the table - NPAs. The hollow nature of bank balance sheets has been an area of concern for a few years, with little being done to remedy the problem. Even if it becomes one of his intractable, the intent is stated upfront, and, at the very least shows willingness to tackle a tough problem. The honesty in including the CPI as an index for measuring inflation rather than the - ahem- more stable- WPI price index again shows willingness to tackle the real problems. Smartly, of course he does not dwell on them and moves swiftly to proposed solutions, consolidating the goodwill he gains today.
4.Look ahead - plan for the years beyond the current doldrums:
As a good leader should, RGR focuses on the long term. Having spoken of specifics in the near term and created enough of a shake up to move the ship out of the doldrums, he leads the conversation to the time when all problems are solved and we can look forward to changes that are necessary. Not only does he reiterate the commitment to liberalisation (which was expected, thus discounted), he speaks of how things should be - painting an idealistic vision of the future with an internationalised rupee, seamless money transfers, inflation indexed investments and mobile based transaction systems.
5. Step up and be firm:
For a nation starved of leaders, here was one who stepped up and claimed his space. This was the right thing to do for a leader. He also used the chance to set his agenda before the forces of consensus, negotiation and circumstance began to weigh in on his actions. This is what he means to do, this is what he wants to do - even if it breaks from tradition. Seemingly contradicting himself while he has the support and freedom to do so - he lay claim to both predictability and the element of surprise, tacking the strategic and the tactical challenges with ease expected of a leader.
That's all. Thank you.
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