Sacking Raghuram Rajan: It is intolerance again

Sacking Raghuram Rajan: It is intolerance again

Anil SharmaUpdated: Thursday, May 30, 2019, 02:47 PM IST
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As the RBI governor Raghuram Rajan conveyed to the central bank’s employees in a letter that was placed on the bank’s website for wider circulation: “… I want to share with you that I will be returning to academia when my term as Governor ends on September 4, 2016”, he was in effect announcing his dismissal by the Modi Sarkar. To interpret this as anything else is to rob the BJP’s battering ram Subramanian Swamy of his rightful claim to brag that he has had the RBI governor, a mere government employee, dismissed. For Swamy it was a command performance executed at the behest of his boss the Prime Minister Narendra Modi.

THIS was the intolerance of another variety. It is something that places conformism over merit. It is neither difficult to see the logic. “We can find brilliant men dime a dozen, but they have to be conformists,” is the way it runs.

Lest anyone has any doubts on this count as well, Swamy provided the clinching evidence by acknowledging on twitter that “……. my admiration for Namo has gone up hugely: media, industrialists, and international bureaucrats piled on him for R3 but he did not bend.” For the uninitiated ones R3 is swamyspeak for Raghuram Rajan. The reference ”did not bend” prompts a query as to when the decision to sack Rajan was taken? Before Swamy got into the act or after?

Now that Rajan has opted to go back to the academia, the Modi Sarkar has been saved the embarrassment of actually denying him a second term. It can always be argued that that the government could have given him a second term, had he waited till the last week of August. But then Raghuram Rajan would not have been this kind of a globally admired central bank governor in such challenging times, if he had placed the issue of a second term in the hands of the Modi Sarkar. Professionals like Rajan work on their terms, and the idea of being subservient just does not fit in their work ethic.

 Swamy’s opinions about Rajan were known to the Modi Sarkar. But they did not get any traction with the government till mid-May this year. It is quite possible that it must be around this time that the Modi Sarkar must have concluded that it has had enough of Rajan the independent minded central banker. Even if the government would have been willing to work with the tensions that exist between the finance ministry and the RBI governor, it was the  ‘independence’ of the economist-professor as a public intellectual whose voice carries weight beyond the limits of his rather unsexy job of managing the figures that the Sarkar could not tolerate.

As a public speaker, he has never burdened by the constraints of the RBI governor’s office, and this was more than apparent from his comment about a ‘one-eyed king in the kingdom of the blind’ or his refusal to take the hint from Swamy’s salvos and insist that he has ‘unfinished agenda’ that could spill over to the second term.

It was not difficult to visualise the strong disapproval of such a person. This was the intolerance of another variety. It is something that places conformism over merit. It is neither difficult to see the logic. “We can find brilliant men dime a dozen, but they have to be conformists,” is the way it runs. Lest, we may forget one such classmate of the ‘sacked governor’ happens to be Jayant Sinha, the minister of state for finance.

But then the process, as well as the end result, educate us quite a lot about the working of the Sangh parivar and the Modi Sarkar. The classic propaganda style of the parivar was visible in the entire process. There were questions about Rajan’s ‘Indian-ness” which is the most important element when it comes to passing through the go-no-go gauge of the Parivar. Then there was the element of deniability in all the allegations levelled against him. There were those high sounding disclaimers from the union finance minister Arun Jaitley, about the persona of the RBI governor being beyond the pale of public discourse. Almost suggesting that all the media hype about Rajan’s second term was needless, the prime minister actually snubbed the media for taking interest in the subject. “I don’t think this administrative subject should be an issue of interest to the media,” he told a US based publication, while asserting that such speculation was premature as the issue would come up only in September. Still months away from that deadline, Rajan is as good as gone. This is the way perfect hatchet jobs are plotted and executed.

When those responsible for steering the ship of the nation take such decisions, it is juvenile to discuss such steps as ‘academia’s gain, nation’s loss.’ It is obvious that in their wisdom they have reckoned that Rajan’s exit as RBI governor does not mean a thing for them when it comes to managing the economy. There may be doubts about their GDP numbers, but it does not prevent them from patting themselves on their backs for being the fastest growing economy. It is also their verdict on the way he managed the affairs during the last two years that he served during their regime. The world may have some opinion about the manner in which he performed, but in their eyes he did not conform to their standards of performance. Period.

It is also obvious that the Modi Sarkar takes Swamy rather seriously on matters concerning the economy. It is certain that when it comes to such matters, the Modi Sarkar gave more weight to Swamy’s doubts about Rajan as compared to the strong approvals by industry heavy weights such a Narayan Murthy or Anand Mahindra. Now it would be instructive to go back to Swamy’s views about the person who should succeed Rajan. Long before Swamy’s anti-Rajan tirade was heeded by the government, he had suggested that Dr R Vaidyanathan who is presently Professor of Finance in the Indian Institute of Management-Bangalore (IIM-B) is the ideal replacement for Rajan. He had also suggested that there should be a ”crisis management team of politicians and economists who are rooted in Indian ethos and not compliant to finance institutions like the IMF and the World Bank.” Now it remains to be seen as to whether this part of Swamy’s advice is accepted or not.

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