The new RBI Governor, Raghuram Rajan, seems keen on introducing a new philosophy in the central bank’s functioning. Besides being a reputed economist, he brings with him a fund of knowledge, and international exposure and experience. The government must use more such people in other sectors too.
Mr. Rajan has an uphill task ahead. He will have to correct the economy mismanaged by those who have taken all major decisions keeping political considerations in mind. The volume of non-performing assets has grown in nationalised banks due to indiscriminate lending, unhealthy competition, lack of proper verification and absence of close monitoring of big borrower accounts.
Much of what the new RBI Governor can achieve will also depend on the government that comes to power in 2014.
Karavadi Raghava Rao,