Govt names US citizen Rajan RBI Governor Many posts he has held could not have been without US backing. This may induce him to act more in favour of US than Indian interests, say analysts. Raghuram Govind Rajan, who was appointed chief economic advisor (CEA) to the Finance Ministry in August last year and is a visiting professor to the World Bank and US Federal Reserve Board (America’s nodal monetary policy authority), was on Tuesday named the new Governor of the Reserve Bank of India (RBI). Fifty-year-old Rajan, an American citizen, also served as International Monetary Fund (IMF) chief economist from October 2003 to December 2006. He will succeed Duvvuri Subbarao, who defied the USA and its collaborators in the Indian government, policy circles and corporate sector to maintain a tight monetary policy in the face of sustained high inflation and a strong downward movement of the rupee. Rajan, who will be the 23rd governor of India’s central bank, will assume office on 5 September. ‘Prime Minister Manmohan Singh has approved the appointment of Dr Raghuram Rajan as RBI Governor for a term of three years,’ the government said in a release. A section of observers has criticised Rajan’s appointment. They point out that he is not only a US citizen but also that several positions he has held or holds — IMF chief economist, visiting professor to the World Bank and US Federal Reserve Board — could not have been without the backing of the American government. This factor, they fear, may induce him to act more in favour of US than Indian interests. There are also fear relating to Reliance Industries Ltd (RIL), which has made huge investments in the US shale gas industry and has also applied with the RBI for a bank licence. They fear that if RIL does, in fact, get this licence, there would emerge a connection between the US shale gas industry and the Indian financial sector. This would be detrimental to India’s national interests, they point out. Rajan is an alumnus of IIT-Delhi and IIM-Ahmedabad and did his PhD in Banking from MIT. He was a professor at the University of Chicago’s Booth School of Business before taking over as CEA.
Posted on: Thu, 08 Aug 2013 10:25:08 +0000
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