Raghuram G Rajan, a former International Monetary Fund (IMF) chief economist and Chicago University professor, famed for his perceptive warnings about the global financial crisis of 2008, took over the new Reserve Bank of India (RBI) governor amid looming economic uncertainties.
Prior to this Rajan was the chief economic adviser, finance ministry and replaced D Subbarao as India’s central bank chief.
Rajan (50), a PhD from Massachusetts Institute of Technology, has done pioneering work in the areas of banking, corporate finance, and economic development, especially the role finance plays in it.
He takes over at a time when policy makers are grappling for options to reverse the deceleration in India’s economy — the worst in a decade — hit by crippling industrial slowdown and a sliding rupee.
Rajan’s recent book, Fault Lines: How Hidden Fractures Still Threaten the World Economy, won the Financial Times Business Book of the Year award in 2010. He also has an earlier book co-authored with Luigi Zingales titled Saving Capitalism from the Capitalists.
Subbarao’s tenure has been marked by the policymakers’ dilemma to balance growth with price stability. Subbarao, who turned 64 last month, took over as the RBI governor on September 5 in 2008 has been marked with hawkish policy stance that sometimes has evoked strong remarks from government’s economic managers.
Last month, the finance minister had told Parliament that the RBI must look beyond its orthodox focus and should also target employment and growth as its key objectives.
On Wednesday, Rajan, who took over as RBI's 23rd governor said: "The primary role of the central bank, as the RBI Act suggests, is monetary stability, that is, to sustain confidence in the value of the country’s money."
"We have two other important mandates; inclusive growth and development, as well as financial stability," Rajan said.