Modi can’t deny global demand for Rajan

Since 1992, every governor of Reserve Bank of India received reappointment, after completion of the initial term. Why this time be any different?

Some would point out, Rajan, not dovish enough.  When he first became governor, he raised rates in a bid to tame inflation and began the easing cycle with caution, only after inflation dropped. This is quite a big deal in India, where politicians just love lower interest rates and which has many a time been a political agenda.

Many think that it is his comments that have hurt image conscious BJP government core. While speaking at the sidelines of World Bank and IMF meeting, when Mr. Rajan was asked about India as a bright spot in the global economy, he said in the land of the blind, one-eyed man is the king.

In addition to that, he forced Indian banks to disclose their actual NPAs and chase on the willful defaulters, many of whom have strong political connections.

Despite these facts, world and Indians see him as a true reformer, who modernized RBI, improved India’s macro-economic appeal and addressed the inherent problems in the banks.

Global market heavy-weights have either personally or publicly called for his re-appointment. Former chief executive of Pimco, Mohamed El-Erian called him one of the best central bank governors. Paul Sheard, chief-economist of Standard & Poor rating agency, said his reappointment will be taken well by the markets.

One of the biggest brands in India, Amul, which is also one of the largest dairy corporation in the world has also weighed in through its latest cartoon banner, which says “Let Raghuramain!” and “Second helping please”.

If Public and market participants demand Rajan, who is Narendra Modi to deny?