This article reflects only my own personal thoughts and do not reflect the official position of any other organisation. Responsibility for the information and views expressed this article lies entirely with me.
The news of the resignation of India’s central banker Raghuram Rajan has unsettled Indian investors, and rightfully so.
Rajan was one of India’s best central bankers and was a cornerstone in driving the Indian economy over the last three years.
Here is a man who in 2005 at a conference in Jackson Hole made some prescient statements about how financial developments have made the world a riskier place and called out the systemic risks posed by banks to the global economy. (His speech can be found here: https://www.imf.org/external/np/speeches/2005/082705.htm). He was derided as a luddite who was misguided. However, the developments of the 2008 financial crisis proved him right and a number of his proposed safeguards have since been implemented.
Some may question why the current Indian administration has removed a man who is widely recognised as an architect of India’s growth story.
It goes back to 2014, when Rajan questioned Modi’s “Make in India” campaign and cautioned against “against picking a particular sector such as manufacturing for encouragement, simply because it has worked well for China. India is different, and developing at a different time, and we should be agnostic about what will work.”
Last year, Rajan also questioned the rising of sectarian tensions and intolerance propagated by factions associated with the currently ruling government. In a speech to the Indian Institute of Technology last October, Rajan lambasted the rising intolerance and stated: “India has always protected debate and the right to have different views. Excessive political correctness stifles progress as much as excessive license and disrespect.”
This is consistent with the pattern of behaviour displayed by the current Indian administration .
What have Modi and his administration achieved in the last two years:
- Stoking of sectarian tensions and maintaining silence when allies foment violence against minorities – check (see: http://www.nytimes.com/2015/10/17/world/asia/cattle-become-a-trigger-for-sectarian-violence-in-india.html?_r=0)
- Support industrial donor allies in an effort to convert agricultural land for industrial purposes with little oversight – check (see: https://zodakreza.wordpress.com/tag/land-acquisition-bill/)
- Oversee the rise of right-wing extremism and reject secularism – check (see: http://www.ndtv.com/opinion/modis-second-swipe-at-secularism-while-abroad-754983
- Have over 50 noted authors, poets, intellectuals return their Sahitya Akademi literary awards – a top award reserved – check (see: http://timesofindia.indiatimes.com/india/Sahitya-Akademi-in-a-fix-as-returned-awards-pile-up/articleshow/49603983.cms)
- Oversee fall in exports and not control food inflation – check (please see: India’s exports fall 17th month in a row and Food inflation up again)
- Abject lack of support for farmers leading to record levels of farmers’ suicide – check (please see: Farmers’ suicides soar in India)
So what does this administration do in response? Remove one man who can help make a difference and help improve matters.
Another great article here: By getting Raghuram Rajan out, Modi may have won, but India has lost
I am genuinely concerned at the state of affairs in India and despite the sometimes effective PR campaign Modi’s government may run, the cracks are beginning to show.
India’s always been a home to alternative thoughts, ideas, ideologies, religions, faiths, beliefs, ethnicities and ways of life. We have been a beacon of hope and democracy for all and it is very sad to see the very edifices of inclusivity and secularism crumbling.