A manufactured boom of Rexit doom

The one remarkable upside of Raghuram Rajan's gubernatorial stint at the Reserve Bank of India is the tremendous enhancement of our collective knowledge of monetary policy and matters money supply. Rajan is making our nostrils positively quiver at the very mention of the acronym RBI. 

 

Not so long ago, I inhabited newsrooms where pedigreed business editors would harpoon the stories (and their writers) about monetary policy or the RBI, chiefly for two reasons. One, no one really cared about the RBI. Two, the central bank heads--in the considered estimation of the editors--looked rather, erm, porcine. Only a mystery fiend who slays six with hatchet (or a racy Kim Kardashian magazine photoshoot) can excite stoic newspaper sub-editors. Mint Steet movers and shakers makes them reach for a shot of double black (no, that beverage containing caffeine).   

 

It was only from the peaceful tranquillity of the op-ed pages that greying economists in their worsteds and tweeds intensely disagreed with RBI's open market operations (Google it) or some such. These op-eds were often coded messages to the fraternity, or thinly-veiled job applications.     

Had Rajan lasted longer as the RBI governor, you would most certainly have encountered lovelorn teenagers plucking rose petals, chanting 'hawkish-doveish' instead of the traditional ' she-loves-me-she loves-me-not ' mantra 

With 'rockstar' Rajan, he of the Sherman McCoy-like Yale (alright, make it Tam-brahm) chin, things are a bit different. Now people-like-us watch his bi-monthly-monetary-policy-statement press conferences with unprecedented attention. Had Rajan lasted longer as the RBI governor, you would most certainly have encountered lovelorn teenagers plucking rose petals, chanting 'hawkish-doveish' instead of the traditional 'she-loves-me-she loves-me-not' mantra. 

 

For Indians, Rajan is to economics what Stephen Hawking is to science. No economic issue howsoever complex can ruffle him. No situation is beyond repair. He explains stuff with sage equanimity that other experts cannot muster. Listening to him makes you feel like being in the company of a Zen Master whose aphorisms you don't always fathom. He almost exemplified the legendary economist and former US Ambassador to India JK Galbraith's memorable observation that pessimism is the mark of superior intellect. And, of course, Raghuram Rajan 'predicted' the global economic crash.

 

Raghuram Rajan's work in academia and the world of high finance is of an unquestionably high standard. 

 

The campaign of calumny masterminded and run by some such as Subramanian Swamy from within the ruling dispensation can mildly be described as pathetic. 

 

But it is the prerogative of a government that is accountable to public to make such appointments. Even if Rajan was tapped on the shoulder by the Modi government, the breast beating in some quarters about his exit dimming the 'India story' is disingenuous. 

 

Read more: The 7 samurais who could be RBI's next emperor

 

Captains of commerce, who privately crib about high interest making the raising of capital impossible, publicly sign Change.org petitions urging the government to retain Rajan. But the bazaar loves status quo, unless a key constituent of the government says 'bhaad mein jaaye disinvestment', as AB Bardhan famously did in the summer of 2004.

 

A $2-trillion economy, growing at a reasonable tick, cannot tank or take off because of a change of guard at the central bank. To argue that India will not find an RBI governor as credible and credentialed as Rajan is like cutting off the nose to spite the face.