“We don’t have a magic wand to make the problems disappear instantaneously. But I have absolutely no doubt, we will deal with them”
Chief Economic Adviser Raghuram Govind Rajan was on Tuesday appointed as Governor of the Reserve Bank of India (RBI) for three years. He will take over from D. Subbarao who demits office on September 4.
At 50, by far one of the youngest to become RBI Governor, Dr. Rajan, who is credited to have correctly predicted the 2008 financial crisis, is set to take over the mantle of the central bank at a time when the economy is faced with a multi-pronged crisis of high consumer price inflation, industrial slowdown, a free fall of the rupee and a widening current account deficit (CAD).
Set to take charge as the 23rd chief of the RBI when he assumes charge from Dr. Subbarao who was not often seen on the same page with the government and pursued a tight monetary policy to rein in inflation, Dr. Rajan, former Chief Economist of the International Monetary Fund (IMF), sought to paint the task he is faced with.
Lest the nation, particularly India Inc., look forward to a complete transformation, Dr. Rajan said in a statement after his appointment that the RBI had a tradition of integrity, independence and professionalism. “These are challenging times for the Indian economy, and the RBI and the government will work together…We don’t have a magic wand to make the problems disappear. But absolutely we will deal with them.”