Friday, September 2nd, 2016

Before exit, RBI Guv Raghuram Rajan talks of ‘unfinished task’

Narada Desk | September 2, 2016 4:09 pm Print
The economist said he wanted a second term at the central bank to complete the unfinished task, "but just didn't reach an agreement" with the government on that

Outgoing RBI Governor Raghuram Rajan has expressed that he was willing to stay a bit longer but could not reach the “right kind of agreement” with the government on extension of his tenure. His term ends on Sunday (September 4).

He said: “Because of … unfinished task, I was willing perhaps to stay provided we could reach the right kind of agreement, we didn’t. That’s where it ended.”

In an India Today TV interview, Rajan defended his controversial speech on perceived growing intolerance in the country, which had riled the government.

Rebutting criticism of having spoken ‘out of turn’ on various occasions, Rajan said it was the “legitimate duty” and “moral responsibility” of public figures to tell young minds what good citizenship is about.

The economist said he wanted a second term at the central bank to complete the unfinished task, “but just didn’t reach an agreement” with the government on that.

“There were variety of places where differences may have been in terms of horizons and this and that. I think we just didn’t reach an agreement where… remember my term came to an end, so it had to be a new term,” he said.

Rajan was asked what kind of consultations he had with the government on further tenure. “We started the dialogue and we were going along that path but essentially we agreed at some point that it did not make sense to pursue the dialogue further,” he answered.

Rajan said he was engaged in a dialogue with the government “whether it made sense for me to continue”.

“When I got into this job, I saw this as a three-year term. I also realized or recognized, I needed to go back to
academia. Too many years away from academia renders you pretty incompetent at research and teaching. So I had to go back. Question was how much time,” he said.

Asked if he was disappointed, Rajan said, “In terms of unfinished tasks, it is always good to finish and look back
and say I have sealed and signed it.”

“Everything comes to an end at some point and you have to move on. Right now my focus is let us look ahead and see what needs to be done and not look back,” he said.

Rajan, after completing his three-year term as RBI Governor on September 4, will return to academia. Several Governors before Rajan, including C Rangarajan, Y V Reddy, Bimal Jalan and D Subbarao had got five-year term.

On inflation, Rajan said he was hopeful that inflation would fall below 6 per cent, a level that was breached in the previous month, while adding that the data should be awaited for August — the last full month of his tenure.

Asked if he had intolerance within the BJP and Sangh Pariwar in mind when he made the controversial speech at IIT-Delhi in October last year, Rajan said, “No. I had the environment certainly at the back of mind where there was a discussion certainly about tolerance.”

“It was a topical issue,” he said. “But a week after I gave the speech, I met a Cabinet minister who said ‘I have been saying exactly these things’. So it wasn’t as if it was ‘anti government’. Which government is going to preach intolerance,” he asked.

On his post-retirement plans, Rajan said he is going to take a break from public speaking for some time as it was important for his successor Urjit Patel at the RBI to get some space.

“So when I move out, I will stay out for a little while,” he said.

“I actually want to learn a little more about certain aspects of the country and travel around a little bit… I
will pop back in. I will work with informal structure… This is an exciting, vibrant, large, immensely interesting country and there is absolutely no reason why I should stay out.”

On advise to his successor, he said Patel is a grown-up man and knows how to do things and has also been handling some of the relationships with the government for some time. “And I have confidence. He will manage it going forward. So I have no advice that will be of any use to him. I have briefed on all the issues we are dealing with, but he has his own mind,” he said.