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Updated: September 2, 2013 22:40 IST

No magic wand to solve challenges overnight: Rajan

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Raghuram Rajan
Raghuram Rajan

Faced with declining value of the rupee and widening current account deficit (CAD), Reserve Bank of India Governor-designate Raghuram Rajan, on Monday, said there was no magic wand to solve the challenges before the country overnight, and he would endeavour to deal with them one at a time.

Dr. Rajan, 50, who has been in the Finance Ministry as the Chief Economic Advisor for barely a year, will replace D. Subbarao, who demits office on September 4, as the RBI Governor.

“We have enough ideas. It is not just the currency, it is financial inclusion, it is growth. I think there is a lot to do. There are challenges in the economy... These things are not going to be overcome overnight. There is no magic wand.

“But there are undoubtedly solutions to many of the problems that the RBI can tackle and the job is to go ahead and do it.

“We will do it one step at a time. Make sure that it progresses everyday,” he told reporters on his last day of office at the Finance Ministry.

Dr. Rajan, a former IMF chief economist, was appointed as the Chief Economic Advisor in the Finance Ministry in August last year. His appointment as the 23rd central bank chief comes at a time when the economy is battling industrial slowdown, declining rupee, rising prices and all-time high CAD.

“Expectations are challenging. I think the job is a complex one. There are many issues including managing institution itself...

“I think in some ways there are commonalties among bureaucracies but each organisation has its own culture, has its own tempo... I am looking forward,” he said.

Besides combating key issues such as volatile rupee and CAD, Dr. Rajan will have to take a call on continuing with the RBI’s practice of mid-quarter policy review every 45 days, which was initiated by Dr. Subbarao.

There has been a speculation that Dr. Rajan is not in favour of mid-quarter reviews and could dispense with the practice, although the scheduled mid-quarter review due later in the month would be brought out.

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Mr Rajan, good luck to you for taking over a crown of thorn, you have
the legacy of your predecessor Mr Subbbarao who tried to the best of
his ability to tackle the bottlenecks at hand and hence its up-to you
to whether follow his footprints or carve own way out. With the vast
experience at hand I am sure you will formulate certain strategies to
iron out the hindrances,the prob we have is of many fold, right from
the stubborn inflation, the liquidity squeeze caused by the global
downturn, high interest to low growth and lack of rapport with the
present government. As a driver of monetary growth RBI has been
grappling with the classic dilemma of promoting growth and keeping
inflation under control, at times termed as being obsessed to
inflation and oblivious to growth.Accusations are not unfounded
though if we take a look at the sluggish investment partly due to high
interest rates,having said that I would also like to put blame on govt
for being slow on reforms.

from:  neeraj bhatt
Posted on: Sep 4, 2013 at 14:13 IST

Amidst of our having grow tired of inflation’s continual moaning we are lucky to see Dr. Rajan who has full of beans to take our economy to better position as the new RBI Governor. Both his acquired a fine global economist status and his education savvy earned him the coveted Office of the R.B.I.Governor. No matter how hard the crunch, he exceeded in passing it on many occasions earlier had made the government put more thrust with Dr. Rajan. Hope he is aware of the government’s intention that it nowhere but dared him to work hard to refrain the overcast of notorious inflation on our feeble economy. Hope the new Governor will be able to play his role on the pitch where D. Subbarao felt very unpredictable to make gains.

from:  RAJU.KOLLURU
Posted on: Sep 4, 2013 at 11:12 IST

Best wishes to Dr. Rajan on his new role as RBI governor. Lots of INDIANS will be watching every move he makes at this critical juncture. Hope he can provide a measurable road map with periodic reporting against the set goals. Politicians, please stay out of Dr. Rajan's hairs.

from:  Murali
Posted on: Sep 4, 2013 at 03:13 IST

The principle followed of Basket of currencies for Rupees has failed.
Based on major import being OIL and major export being US
software+manpower to gulf countries, it will be wise to link Rupee with
US DOLLAR. This will save us from daily fluctuation of Rupee.

from:  R.Natarajan
Posted on: Sep 4, 2013 at 02:11 IST

03-09-13 I fully agre with the views of cKRISHNASWAMY V. In fact many
problems are created by rigid obedience of officers and policemen to
politicians who are only thinking of their own prosperity during their
term by amassing wealth and properties. Many lawyers also amass wealth
and properties due to blessings of politicians by supporting and
protecting them. This actually casues injustice to common people.
This is why gap between rich and poor increases. Hence Dr. Rajan
should be firm like the present RBI Governor and not fall into trap of
politicians who are only like fly by night people. B S GANESH

from:  B S GANESH
Posted on: Sep 3, 2013 at 20:53 IST

Why IMF related people had takenover ministries and financial bodies of India.There is no symptom of the purported economic progress and the rupee had depreciated a lot and our economy is in a shambles despite the presence of them.People are suspecting their abilities..

from:  K.Sugavanam
Posted on: Sep 3, 2013 at 17:08 IST

As he said, to be frank there is no magic wand to solve the issues overnight. But 1 way which surely leads to surplus is to revive the savings schemes with Govt. institutions Viz., Post Office/Scheduled Banks/LIC/etc...

Above mentioned institutions do have savings scheme but not effectively. RBI has to urge Govt. to regulate and restructure the savings scheme and encourage the people to invest in such Govt. schemes instead of markets Viz., MF/ULIP/etc...

Forex had a fixed rate (As our Honorable PM disclosed & accepted that now it is linked with market) & now due to greed they are linked with market which has ruined our nations reserve.

Our nations growth strongly lies on production. Whereas we are now a servicing nation which made our people lazy and pushed to the attitude of earning more within a short period without hardwork.

AGRICULTURE which is our backbone of our nation has to be (NATURALLY) developed with PROFESSIONAL Guidance.

JOB IS NOT COMPLEX... "POLITICIANS"

from:  Shankar
Posted on: Sep 3, 2013 at 13:34 IST

hope the new head of RBI sticks to the high principles of the
institution without succumbing to politicians who will be more
interested in retaining power in the coming elections.
It is a pity in this country we depend upon bodies like Supreme court
and RBI to protect us than the elected politicians

from:  KRISHNASWAMY V
Posted on: Sep 3, 2013 at 12:32 IST

Perhaps like the great Maharajas of old he should dress up like an
ordinary mortal and move around the cities like an ordinary person and
then he will learn not to meddle but to enforce ground rules in many
hundred ways to save and enjoy the benefit at the top.

from:  Prof.Paul.V.John
Posted on: Sep 3, 2013 at 05:31 IST
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