Most Indians would be hard-pressed to name India’s last five RBI governors. Heck, most journalists would have a hard time. But if you ask anyone who the current RBI governor is, the answer will come in a heartbeat. That Raghuram Rajan is popular is beyond doubt. However, the reasons for his popularity are perhaps what the BJP should come to fear.
He talks sense most of the time, isn’t afraid to act as a voice of conscience even when it means going against the line that the Finance Minister or the government of India are flogging, But perhaps most importantly he isn’t afraid to speak his mind on a variety of topics and in a language that we understand. Being a teacher in the past has clearly helped.
When the Indian government was struggling to control the rupee’s massive slide against the dollar in 2013, a worried 10-year-old schoolgirl sent a $20 bill to him, offering to help the economy.
About 10 days later, an official looking envelope arrived, addressed to Laila. She was shocked to discover that it was from the bank governor himself.
“I am deeply touched by your kind gesture,” he wrote. “I am aware this is a challenging time for the country and I have no doubt the economy will emerge stronger.”
“I am returning the $20 note you had sent with the assurance that we have adequate foreign exchange reserves in RBI to manage the situation,” Rajan wrote.
It was a gesture that won hearts that showed this man was something else.
When Rajan was once asked about the state of politics in India, his answer wasn’t quite what we have come to expect from India’s officials working with the government.
“One widely held hypothesis is that our country suffers from want of a ‘few good men’ in politics. This view is unfair to the many upstanding people in politics. But even assuming it is true, every so often we see the emergence of a group, usually upper middle class professionals, who want to clean up politics. But when these ‘good’ people stand for election, they tend to lose their deposits. Does the electorate really not want squeaky clean government?”
There was another time when he had Q&A session lined up at The Times of India‘s Newspaper in Education (NIE) meet.
Pranav Rajkumar, of Thakur Vidya Mandir, had a simple question:
“In India and various parts of Mumbai there are so many slums and poor people; why should it be wrong to create more extra money and distribute it among these people?”
Rajan’s reply, which is reproduced in full below, got the explanation just right.
“Whether it is money, food, clothing, whatever, certainly some amount of distribution is warranted in a poor country. But if are to really distribute something, the best thing to distribute is opportunity. Can we distribute opportunity? And this goes back to the saying, if you give somebody fish, he will be back tomorrow for more; if you teach him to fish, he will be independent, he won’t have to come back. It does mean a certain basic level of nutrition, access to school, access to better education, access to scholarships. Those are very important, they give a chance to break away.”
“But they should not feel they are permanently in a situation where they are continuously going to get. It makes them lose respect for their situation. But if they can become independent, they have both self respect and respect of others. I think we should aim to broaden opportunity; we should look for children falling behind and make sure they have the chance to succeed.”
Earlier this month, he spoke about students and education loans while speaking at the convocation ceremony of Shiv Nadar University.
“We also should make sure that unscrupulous schools do not prey on uninformed students, leaving them with high debt and useless degrees.”
Given how many of us have fallen into the trap, it was just the right thing to say and the right place to say it too.
“Words are, of course, the most powerful drug used by mankind,” Rudyard Kipling once said. But Rajan has used more than just words to win our hearts.
Within days of Rajan’s appointment as RBI chief, the rupee stabilised. His policy action broke the back of inflation and he has sworn to clean up the banking sector mess. All things that we needed. All things that Rajan delivered on.
He may not be James Bond or Big B as some had claimed when he was first appointed but he has his heart in the right place and a mind set on setting things right in the way they ought to.
So when Subramaniam Swamy decided to go out on a limb and demand his resignation, the initial reaction was one of shock. We all know Swamy to be a motormouth, but even by his standards, this was edging towards the loony bin.
Swamy had called on Modi to sack Rajan immediately or not extend his term as he was not “mentally fully Indian” because the widely respected economist kept extending his US green card. As ridiculous as the demand was, the BJP MP faced instant rebuttals on social media like:
A poll of CEOs conducted by the Economic Times revealed that 90 percent of participants felt Rajan should get a second term as governor of the Reserve Bank of India, when the current one ends in September. And this despite him not making more money available in the economy.
Modi has always wanted to project a certain kind of idea about India to the world. Rajan fits right in. When Rajan talks, the world listens and that is another reason to keep the central banker around. He didn’t need to take this job (he gets paid Rs 2 Lakh a month and that isn’t a lot for a man of his qualifications), he took it because he wanted to make a difference. By all accounts, he has.
The outpouring of support for the central banker has been so great that — given how seriously the BJP takes public opinion — one can be pretty sure that Rajan won’t be going anywhere.
Maybe after a while, Swamy will change track and say that is what he wanted all along. And you can be sure, he’ll get trolled for that too.
As the RBI governor would say:
I don’t know what you want to call me… Santa Claus…you want to call me hawk, I don’t know. I don’t go by this. My name is Raghuram Rajan and I do what I do.
And given how well he’s doing what he does, it’s no surprise no one wants him gone just yet.