Consequences of Raghuram Rajan’s exit on Indian Economy

With Raghuram Rajan finally deciding to put an end to the futile scuffle ignited by the feckless and ill-advised endeavors of politicians of our nation, respected Mr. Subramanian Swami to name a few, Indian economy is left at the verge of getting into aberrations for its master leaves it to the supposed ‘intelligentsia’ deemed capable of handling it (if they so can!).

His exit has clearly indicated hints of doubts in and around the world about the efficacy and commitment of Indian Government to structural reforms when it was banked upon as one of the important salvagers for combatting troubles of emerging markets.

Sir Raghuram, as I would like to address him, is a man of honor who encourages the development of intellectual wisdom and creation of ideas that can prove to be of immense use in solving real life problems, much enough to create a lasting impact. Being an ex-Chief Economist at the International Monetary Fund and currently a professor at the University of Chicago, he is an inspiration and motivation to many young minds which thrive to model their career paths similar to that of the Master.

Speaking of his impact: Going back to the month of his joining the central bank of India, September 2013, when the economy was struggling its way to equanimity going down at an annualized rate of 2% QoQ, when the rupee declined 16.6% YoY, consumer prices soared to 10%, and the current account deficit was expected at 4% of GDP (Source: CNBC). He now leaves with an economy soaring close to 7.9%, rupee losing at only 4.7% from its earlier year levels, inflation lowered to 5.8%, and a staggering current deficit cut to 1% of GDP.

Without the immaculate guidance of its treasured Governor, an ace in the pack, Dr. Raghuram Rajan, how Indian economy finds its way out remains to be seen.

Written by Namisha, Reseach Analyst Finance Academics, ICoFP


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