experience globally and as a Chief Economic Advisor in the government would stand him in good stead”
Adi Godrej, Chairman of Godrej Group
He is the right person to handle our
financial markets, he is likely to be innovative about the banking
The former IMF Chief Economist takes over at a time when the economy is passing through a rough weather . While the plunge in rupee has emerged as a critical challenge stoking fears about the already grave current account situation, the persistent slowdown in industrial growth continues to be a major concern
“Rajan comes with an excellent background in financial matters. He has been one of the outstanding professors and in the last one year or so he has been dealing with the problems in India. And therefore at the moment I think he will make an excellent Governor,” Rangarajan said.
Prime Minister Manmohan Singh has approved appointment of Rajan, currently posted as Chief Economic Advisor in the Finance Ministry.
His appointment comes at a time when the Indian economy is passing through rough weather and the government and the central bank are not particularly seen to be in sync on ways to handle the situation.
He will succeed D Subbarao, who by his hawkish policy stood his ground on continuing with a tight monetary policy despite repeated entreaties from the government to ease interest rates to boost growth. Subbarao will demit office on September 4 after completing his five-year term.
In the first quarter review of the monetary policy announced July 30, the central bank has left key policy rates unchanged and lowered the growth forecast for the current financial year to 5.5 percent from its earlier projection of 5.7 percent.
The PMEAC chief said Rajan has an understanding of the Indian economic situation and has also worked with the Prime Minister.
Planning Commission Deputy Chairman Montek Singh Ahluwalia said, “it’s a very tough time, we need someone who can give direction…the important thing is giving leadership for the next five years on how should the Indian financial system move. I think Rajan will be the best person to do that”, he said.
Hailing the announcement of Raghuram G Rajan as the new RBI Governor, India Inc said the appointment of the former IMF Chief Economist will help bring the economy back on growth path.
Industry body Assocham said, “We extend full-cooperation and expects him to take bold steps needed for controlling inflation. The need of the hour is to create conducive monetary conditions that help build strong supply response in the economy.”