Missing Raghuram Rajan with great Enthusiasm!


Change is inevitable and often traumatic. The chaos instinctively makes us seek support and yearn for robust leadership – the strong hands that can steady the ship in choppy and turbulent waters.

Reserve Bank of India Governor – Dr. Raghuram Rajan (Sept 2013 – Sept 2016)                                                                               Image Courtesy – scoopwhoop.com

October 2013 – We saw what looked like a scary run on the INR as it touched ‘lifetime lows’ and our RBI Governor then became the face of the team’s resolve to anchor our lifeline in International markets.

October 2016 – Faced with another storm through demonetization that removed 86 % of the currency value in circulation, (a self-inflicted surgery initially meant to shed black money and on second thoughts to promote a cashless economy), the RBI Chief seems to abjure from being the public face of the initiative. Derisively we hear about ‘Reverse Bank of India’ on account of the many flip-flops in the initiative that has wrought havoc for the common man and created a new ‘lifetime low for INR.

Perception is reality – especially when there is real pain associated with an initiative. One does instinctively miss Raghuram Rajan and begin to even understand why chose not to seek a second term as RBI Governor.

On December 9 former RBI Governor Raghuram Rajan delivered a lecture on the state of global economy but reportedly made no mention of the prevailing economic scenario in India or the controversial demonetisation drive. That’s true class of someone who doesn’t want to rub salt in your wounds and said, ‘I told you so’. Remember he maintained a dignified silence in the face of outrageous politically motivated slander campaign that was mounted to oust him.

Guess we didn’t deserve to have him continue in a leadership role when an independent voice is seen as a threat and ‘Group Think’ has established its primacy. His views on demonetisation are known and sound prescient now. In August 2014 he answered a query from the audience at the Lalit Doshi Memorial lecture where he felt it was not an effective solution.

Question: RBI’s proposal to phase out old notes which do not have the year printed. Suggestion – a: Replacing old currency notes under a new series. b: Also consider adding new series of Notes with Rabindranath Tagore, Homi Bhabha, et al.

Response: I am not quite sure if what you meant is demonetise the old notes and introduce new notes instead. In the past demonetisation has been thought off as a way of getting black money out of circulation. Because people then have to come and say “how do I have this ten crores in cash sitting in my safe” and they have to explain where they got the money from. It is often cited as a solution. 

Unfortunately, my sense is the clever find ways around it. They find ways to divide up their hoard in to many smaller pieces. You do find that people who haven’t thought of a way to convert black to white, throw it into the Hundi in some temples. I think there are ways around demonetization. It is not that easy to flush out the black money. Of course, a fair amount may be in the form of gold, therefore even harder to catch. 

I would focus more on the incentives to generate and retain black money. A lot of the incentives are on taxes. My sense is the current tax rate in this country is for the most part reasonable. We have a reasonable tax regime, for example, the maximum tax rate on high-incomes is 33%, in the US it is already 39% plus State taxes, etc., it takes it to near 50. We are actually lower than many industrial countries. 

Given that, there is no reason why everybody who should pay taxes is not paying taxes. I would focus more on tracking data and better tax administration to get at where money is not being declared. I think it is very hard in this modern economy to hide your money that easily. 

Sense and sensibilities that obviously don’t find sympathy in the current dispensation. We will, of course, survive this crisis and progress. Nation states and institutionalized democracies are resilient and never quite at the mercy of a ‘few-good-men’ or otherwise.

So we miss Raghuram Rajan and share interesting jokes on social media to get through the painful period. The Indian instinct for ‘jugaad’ is in full flow and quite a few interesting and positive stories are emerging from the crisis. So let us remember the man and what might have been a memorable second stint by looking at few of his quotable quotes –


‘Not taking risks one doesn’t understand if often the best form of risk management’.

‘We are neither hawks, nor doves.We are actually Owls. The Owl is traditionally a symbol of wisdom. We are doing what is necessary for the economy.’

‘We are in a world where we don’t know the fundamental value of any asset’.

‘What kind of group sentiments, should ideas or behavior that hurt a particular intellectual position or group not be banned, possibly, but a quick resort to bans with chill all debate can anyone or everyone will be anguished by the ideas they dislike. It is far better to improve environment for ideas through tolerance and mutual respect.’

‘The Governorship of the Central Bank is not meant to win one votes or Facebook ‘likes’. But I hope to do the right thing, no matter what the criticism, even while looking to learn from the criticism’. 

‘We have this saying – ‘In the land of the blind, the one-eyed man is King’ We are a little bit that way.’


Well we have another saying in Tamil – ‘Even is you lack wisdom yourself, you will do well in life if you can listen to others who have it’.  Imagine the potentialities we missed for not listening to that …


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