I’m not an economist or an administrator so my opinion of whether Raghuram Rajan should have continued as governor of the Reserve Bank carries little weight. Of course, I have one but I won’t inflict it upon you. However, I do believe that he has been treated very shabbily. That’s the point I want to make today.
Dr Rajan is an intelligent, articulate, convincing and personable man. What strikes you when you confront him as an interviewee is the clarity of his expression. His views are easy to understand, his thinking simple to follow. There is no jargon. He speaks in easy flowing sentences, unlike many academics who are needlessly convoluted.
When you meet him at dinner parties his gentle wit and easy smile make him an attractive person to chat to. If I recall correctly, his eyes seem to smile as well.
Now, intelligent people who speak well will be asked their opinion and it will matter when they speak out. Dr Rajan knew this and he wasn’t scared or shy to answer questions even if, at times, they were awkward or required careful handling. So, not surprisingly, he spoke about the rising tide of intolerance or the unrealistic euphoria surrounding India’s economic exceptionalism.
This may have been unusual. His predecessors might have been more reticent, but can you really say these are issues outside his remit as governor? Does the mood in the country not affect investment? Do exaggerated opinions of India’s performance not breed complacency? And if the answer is yes, should the governor not forewarn?
After all, Mark Carney, the Canadian governor of the Bank of England, has spoken against Brexit and though it wasn’t liked by many, no one questioned his right to do so even though at the time the future of Britain balanced precariously on the outcome.
Unfortunately, we’re not as mature and accommodating nor as restrained and discreet as the British. So Subramanian Swamy launched a tirade against Dr Rajan. He accused him of “willfully and deliberately wrecking the economy”. He claimed that because Dr Rajan was a US green card holder he was “mentally not fully Indian”.
When Dr Rajan, in an interview in Washington, said “I think we have still to get to a place where we feel satisfied. We have this saying ‘in the land of the blind the one-eyed man is king’ we are a little bit that way”, Nirmala Sitharaman ticked him off and said he should have chosen better words. Yet what Dr Rajan had said was unexceptional and, idiomatically, delightfully desi.
Alas, no one rose to Dr Rajan’s defence. The Prime Minister was silent whilst the Finance Minister spoke elliptically. They did not add to the attack but they did not speak in defence either. In contrast how different was Mr Jaitley’s response when Dr Swamy targeted the chief economic advisor.
In these circumstances are you surprised Dr Rajan chose not to make himself available for a second term? Perhaps he wanted to but valued his self-respect more? And proof he made the right decision comes from Subramanian Swamy’s gloating comment Dr Rajan was leaving “because the government did not give him a second chance”.
There is a simple lesson here. We won’t bring back the best and brightest if we treat them like this. There are many good Indians living abroad, whose services we need, but we won’t lure them home if they fear they’ll be treated the way Dr Rajan was.
The views expressed are personal