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==Background==
==Background==
REuropean Austerity]. NY Times. April 28, 2012</ref><ref>[http://www.project-syndicate.org/commentary/the-global-jobs-challenge Project Syndicate-Michael Spence-The Global Jobs Challenge-October 2011]. Project-syndicate.org (2011-10-17). Retrieved on 2012-05-16.</ref>
Raghuram Rajan was born 1963 in [[Bhopal]], [[Madhya Pradesh]]<ref>Singh, Mammohan (4 February 2014) [http://daily.bhaskar.com/article/MON-SPE-7-interesting-facts-about-23rd-rbi-governor-raghuram-g-rajan-on-his-51st-birthda-4511064-PHO.html 7 Interesting facts about 23rd RBI Governor Raghuram Rajan] Daily Bhaskar, Retrieved 11 November 2014</ref> in a [[Tamil people|Tamil]] family<ref>Crabtree, James (30 August 2013) [http://www.ft.com/intl/cms/s/0/48090996-10bf-11e3-b291-00144feabdc0.html#axzz2yrE3DfnE Raghuram Rajan, academic in a raging storm] The Financial Times (requires a subscription), Retrieved 11 November 2014</ref> and his father was a senior officer in the [[Intelligence Bureau (India)]].<ref name="FinancialTimes">Crabtree, James (15 August 2014) [http://www.ft.com/cms/s/2/b049ce16-230e-11e4-a424-00144feabdc0.html#axzz3IkxlVXJt Lunch with the FT: Raghuram Rajan] The Financial Times, Retrieved 11 November 2014</ref> He did his schooling from 7th to 12th standard in [[Delhi Public School, RK Puram]]<ref>"The roots of Recession" Quote: "RAGHURAM RAJAN has always been a little precocious. Arguably the most famous alumnus of kolkata Public School, he was one of the youngest professors at Chicago's Booth School of Business, and, at 40, the youngest chief economist of the International Monetary Fund."[http://www.thefreelibrary.com/The+roots+of+recession.-a0234020538]</ref> and graduated from the [[Indian Institute of Technology, Delhi]] with a bachelor's degree in [[electrical engineering]] in 1985, after which he acquired a Post Graduate Diploma in Business Administration from the [[Indian Institute of Management Ahmedabad]] in 1987. He won Director's Gold Medal in [[IIT Delhi]] and was a Gold medalist at [[IIM Ahmedabad]]. He received a [[PhD]] in Management from the [[MIT Sloan School of Management]] in 1991 for his thesis titled "Essays on Banking".<ref>"[http://dspace.mit.edu/handle/1721.1/13883 DSpace@MIT: Essays on banking]</ref>
Rajan joined the [[The University of Chicago Booth School of Business|Booth School of Business]] at the [[University of Chicago]]. He was the [[List of IMF Economic Counsellors|Chief Economist]] at the [[International Monetary Fund]] (IMF) from October 2003 to December 2006. Rajan’s research interests are in banking, corporate finance, and economic development, especially the role finance plays in it. He co-authored Saving Capitalism from the Capitalists with Luigi Zingales in 2003. He wrote Fault Lines: How Hidden Fractures Still Threaten the World Economy in 2010, for which he was awarded the Financial Times-Goldman Sachs prize for best business book that same year.<ref name=CV-booth>{{cite web|title=Raghuram G. Rajan (Curriculum Vitae)|url=http://faculty.chicagobooth.edu/raghuram.rajan/vitae/CV.pdf|publisher=[[Booth School of Business]]|accessdate=13 August 2015}}</ref>

member of the [[Group of Thirty]]. He was the President of the [[American Finance Association]] in 2011 and is a member of the [[American Academy of Arts and Sciences]]. In November 2008, Indian Prime Minister [[Dr Manmohan Singh]] appointed Rajan as an honorary economic adviser. That same year, a high-level committee on financial reforms, headed by Rajan, submitted its final report to the [[Planning Commission of India|Planning Commission]].<ref>Sanjiv Shankaran et al. "[http://www.livemint.com/2008/11/04000614/Raghuram-Rajan-is-adviser-to-P.html Raghuram Rajan is adviser to PM]". ''[[Mint (newspaper)|Mint]]''. 4 November 2008. Retrieved on 18 August 2012.</ref>

Replacing [[Kaushik Basu]], Rajan was appointed as [[Chief Economic Adviser to the Government of India]] on 10 August 2012.<ref>"[http://www.thehindu.com/news/national/article3753883.ece Raghuram Rajan appointed as new CEA]. ''[[The Hindu]]''. August 11, 2012. Retrieved on 18 August 2012.</ref> He also prepared the Economic Survey for India for the year 2012–13, on 27 February. On 6 August 2013 it was announced that Rajan would take over as the next [[Reserve Bank of India|RBI]] Governor.<ref>[http://www.indianexpress.com/news/raghuram-rajan-in-rbis-new-guv-list/793476 Raghuram Rajan in RBI's new Guv list]. ''[[The Indian Express]]''. May 20, 2011</ref> He was appointed RBI Governor for a term of 3 years succeeding [[Duvvuri Subbarao]] whose term ended on 4 September 2013.

In 2014 it was suggested that Rajan could take over from [[Christine Lagarde]] as head of the IMF when Lagarde steps down in 2016.<ref name="Euromoney">Verma, Sid (October 2014) [http://www.euromoney.com/Article/3388337/Rajans-surgical-strikes.html?single=true Rajan’s surgical strikes] Euromoney, Retrieved 11 November 2014</ref>

On 9 November 2015, Rajan was appointed as Vice-Chairman of the [[Bank for International Settlements]] (BIS).<ref>{{Cite web|url = https://www.bis.org/press/p151110.htm|title = Press release: BIS Board appoints Raghuram Rajan as Vice-Chairman|date = |accessdate = |website = |publisher = |last = |first = }}</ref>

==Economic and political views==

Rajan advocates giving financial markets a greater role in the economy. In the book ''Saving Capitalism from the Capitalists: Unleashing the Power of Financial Markets to Create Wealth and Spread Opportunity''<ref>Rajan, R. G., & Zingales, L. (2003). Saving Capitalism from the Capitalists: Unleashing the Power of Financial Markets to Create Wealth and Spread Opportunity. New York: Crown Business.
</ref> co-authored with Luigi Zingales, the two authors argue in favour of deregulated financial markets in order to facilitate access of the poor to finance: "Capitalism, or more precisely, the free market system, is the most effective way to organise production and distribution that human beings have found … healthy and competitive financial markets are an extraordinarily effective tool in spreading opportunity and fighting poverty. …Without vibrant, innovative financial markets, economies would ossify and decline." (p &nbsp;1)

In 2005, at a celebration honouring [[Alan Greenspan]], who was about to retire as chairman of the [[US Federal Reserve]], Rajan delivered a controversial paper that was critical of the financial sector.<ref>Raghuram Rajan. "[http://www.nber.org/papers/w11728 Has Financial Development Made the World Riskier?]". [[National Bureau of Economic Research]]. November 2005. Retrieved on 18 August 2012.</ref> In that paper, "Has Financial Development Made the World Riskier?", Rajan "argued that disaster might loom."<ref name="WSJ">Justin Lahart. "[http://online.wsj.com/article/SB123086154114948151.html Mr Rajan Was Unpopular (But Prescient) at Greenspan Party]". ''[[Wall Street Journal]]''. 2 January 2009. Retrieved on 18 August 2012.</ref> Rajan argued that financial sector managers were encouraged to "take risks that generate severe adverse consequences with small probability but, in return, offer generous compensation the rest of the time. These risks are known as tail risks. But perhaps the most important concern is whether banks will be able to provide liquidity to financial markets so that if the tail risk does materialise, financial positions can be unwound and losses allocated so that the consequences to the real economy are minimised."

The response to Rajan's paper at the time was negative. For example, former [[U.S. Treasury Secretary|US Treasury Secretary]] and former Harvard President [[Lawrence Summers]] called the warnings “misguided” and Rajan himself a "luddite".<ref>[[Paul Krugman]]. "[http://www.nytimes.com/2009/09/06/magazine/06Economic-t.html How Did Economists Get It So Wrong?]". ''[[The New York Times]]''. 2 September 2009. Retrieved on 18 August 2012.</ref> However, following the [[2008 economic crisis]], Rajan's views came to be seen as prescient; by January 2009, ''[[The Wall Street Journal]]'' proclaimed that now, "few are dismissing his ideas."<ref name="WSJ"/> In fact, Rajan was extensively interviewed on the global crisis for the Academy Award winning documentary film ''[[Inside Job (2010 film)|Inside Job]]''.
Rajan wrote in May 2012 that the causes of the ongoing economic crisis in the US and Europe in the 2008–2012 period were substantially due to workforce competitiveness issues in the globalisation era, which politicians attempted to "paper-over" with easy credit. He proposed [[Supply-side economics|supply-side]] solutions of a long-term structural or national competitiveness nature: "The industrial countries should treat the crisis as a wake-up call and move to fix all that has been papered over in the last few decades... Rather than attempting to return to their artificially inflated GDP numbers from before the crisis, governments need to address the underlying flaws in their economies. In the United States, that means educating or retraining the workers who are falling behind, encouraging entrepreneurship and innovation, and harnessing the power of the financial sector to do good while preventing it from going off track. In southern Europe, by contrast, it means removing the regulations that protect firms and workers from competition and shrinking the government's presence in a number of areas, in the process eliminating unnecessary, unproductive jobs."<ref name="foreignaffairs1">Rajan, Raghuram G. (2012-05-01) [http://www.foreignaffairs.com/articles/134863/raghuram-g-rajan/the-true-lessons-of-the-recession Foreign Affairs-Rhaguram Rajan-The True Lessons of the Financial Crisis-May/June 2012]. Foreignaffairs.com. Retrieved on 2012-05-16.</ref>

During May 2012, Rajan and [[Paul Krugman]] expressed alternate views on how to reinvigorate the economies in the US and Europe, with Krugman mentioning Rajan by name in an opinion editorial. In an article in ''Foreign Affairs'' magazine, Rajan had advocated structural or supply-side reforms to improve competitiveness of the workforce to better adapt to globalisation, while also supporting fiscal austerity measures (E.g., raising taxes and cutting spending). Rajan conceded that austerity could slow economies in the short-run and cause significant "pain" for certain constituencies.<ref name="foreignaffairs1"/><ref>[http://www.project-syndicate.org/commentary/central-bankers-under-siege Project Syndicate-Raghuram Rajan-Central Bankers Under Siege-May 2012]. Project-syndicate.org (2012-05-08). Retrieved on 2012-05-16.</ref> Krugman rejected this view, advocating instead traditional Keynesian fiscal stimulus (E.g., spending and investment) and monetary stimulus, arguing the primary factor slowing the developed economies was a general shortfall in demand across all sectors of the economy, not structural or supply-side factors that affected particular sectors.<ref>Paul Krugman [http://www.nytimes.com/2012/05/11/opinion/krugman-easy-useless-economics.html Easy Useless Economics]. NY Times. May 2012</ref> This debate occurred against the backdrop of a significant "austerity vs stimulus" debate occurring at the time, with some economists arguing one side or the other or a combination of both strategies.<ref>Ummelas, Ott. (2012-05-12) [http://www.bloomberg.com/news/2012-05-12/rehn-rejects-false-choice-between-austerity-stimulus.html Bloomberg-Rehn Rejects ‘False’ Choice Between Austerity, Stimulus-May 2012]. Bloomberg.com. Retrieved on 2012-05-16.</ref><ref>Christine Romer-Hey [http://www.nytimes.com/2012/04/29/business/austerity-is-no-quick-answer-for-europe-economic-view.html Not So Fast on European Austerity]. NY Times. April 28, 2012</ref><ref>[http://www.project-syndicate.org/commentary/the-global-jobs-challenge Project Syndicate-Michael Spence-The Global Jobs Challenge-October 2011]. Project-syndicate.org (2011-10-17). Retrieved on 2012-05-16.</ref>


In a 2014 interview, Rajan said his major targets as governor of the Reserve Bank of India were to lower inflation, increase savings and deepen financial markets, of which he believed reducing inflation was the most important. A panel he appointed proposed an inflation target for India of 6% for January 2016 and 4% (+-2%) thereafter.<ref name="Euromoney"/.
In a 2014 interview, Rajan said his major targets as governor of the Reserve Bank of India were to lower inflation, increase savings and deepen financial markets, of which he believed reducing inflation was the most important. A panel he appointed proposed an inflation target for India of 6% for January 2016 and 4% (+-2%) thereafter.<ref name="Euromoney"/.

Revision as of 18:29, 13 February 2016

Raghuram Rajan
Dr Raghuram G Rajan in 2005
23rd Governor of Reserve Bank of India
Incumbent
Assumed office
4 September 2013
Preceded byDr D Subbarao
Personal details
Born (1963-02-03) 3 February 1963 (age 61)
Bhopal, Madhya Pradesh
NationalityIndian [1]
SpouseRadhika Puri
Alma materIIT Delhi (B Tech)
IIM Ahmedabad (PGDBM)
MIT Sloan School of Management (PhD)

Raghuram Govind Rajan (born 3 February 1963) is the current and the 23rd Governor of the Reserve Bank of India. He took charge of India's central banking institution on 5 September 2013, succeeding Duvvuri Subbarao. Rajan was chief economic adviser to India's Ministry of Finance during the previous year and chief economist at the International Monetary Fund from 2003 to 2007. He is on leave of absence as a professor of finance at the graduate business school at the University of Chicago.[2]

Background

REuropean Austerity]. NY Times. April 28, 2012</ref>[3]

In a 2014 interview, Rajan said his major targets as governor of the Reserve Bank of India were to lower inflation, increase savings and deepen financial markets, of which he believed reducing inflation was the most important. A panel he appointed proposed an inflation target for India of 6% for January 2016 and 4% (+-2%) thereafter.Cite error: The <ref> tag has too many names (see the help page). He was awarded the fifth Deutsche Bank Prize for Financial Economics 2013 on 26 September 2013 for his "ground-breaking research work which influenced financial and macro-economic policies around the world".[4] He was conferred the Best Central Bank Governor award for 2014 by Euromoney Magazine. He is conferred with the prestigious Governor of the Year Award - 2014 from London-based financial journal Central Banking.[5][6]

Achievements as the RBI governor

  • Rajan is known for his primary focus on curbing inflation. His biggest achievement is that he successfully brought down retail inflation to 3.78% in July 2015 from 9.8% in September 2013 – the lowest since the 1990s. Wholesale inflation was down to a historic low of -4.05% in July 2015 from 6.1% in September 2013.
  • In his first speech as RBI governor, Rajan promised banking reforms and eased curbs on foreign banking, following which Sensex rose by 333 points or 1.83%. After his first day at office, the rupee rose 2.1% against the dollar.
  • Under Rajan, the RBI adopted consumer price index (CPI) as the key indicator of inflation, which is the global norm, despite the government recommending otherwise.
  • India’s forex reserve is now stronger by about 30% than it was two years back. During the recent depreciation, Rajan said the central bank has forex reserves to the tune of $380 billion, which is a comfortable level, and would intervene if there was a need.
  • Under Rajan, two universal banks have been licensed and eleven payment banks have been given the nod. This is expected to extend banking services to the nearly two-thirds of the population who are still deprived of banking facilities.

Personal life

Raghuram Rajan is married to Radhika Puri Rajan, a classmate from IIM Ahmedabad, who is now a Lecturer in Law at University of Chicago Law School and also serves on the Faculty of University of Chicago Booth School of Business as the Adjunct Associate Professor of Behavioral Science. They have a daughter and a son. His brother Mukund Rajan is the Brand Custodian and Chief Ethics Officer of Tata Sons[7][8][9] Rajan is a vegetarian and enjoys playing tennis and squash.[10][11] Rajan is an avid quizzer who appeared on national television with some of his friends in 1980s. He has also participated in various marathons, latest being the Standard Chartered Mumbai Marathon 2015.[12]

Publications

References

  1. ^ "I am an Indian citizen: Raghuram Rajan". 30 October 2013. Quote: "I am an Indian citizen. I have always been an Indian citizen. I always held an Indian passport. I held an Indian diplomatic passport when my father was in the foreign service and when I travelled on behalf of the Ministry of Finance.I have never applied for the citizenship of another country. I have never been a citizen of another country and have never taken a pledge of allegiance to another country."
  2. ^ "Chicago Booth professor Raguhram Rajan is named Governor of Reserve Bank of India". 6 August 2013. Quote: "Raghuram Rajan, a professor of finance at the University of Chicago Booth School of Business and the Indian government’s Chief Economic Adviser, has been named Governor of the Reserve Bank of India, the school announced today. While in this post, Rajan will be on leave from the university."
  3. ^ Project Syndicate-Michael Spence-The Global Jobs Challenge-October 2011. Project-syndicate.org (2011-10-17). Retrieved on 2012-05-16.
  4. ^ "RBI governor Raghuram Rajan receives Deutsche Bank Prize, 2013". Business Standard. 27 September 2013. Retrieved 27 September 2013.
  5. ^ (15 October 2014) Raghuram Rajan gets Euromoney's best central bank governor award The Hindu Business Line, Retrieved 11 November 2014
  6. ^ http://www.centralbanking.com/central-banking/news/2389654/the-winners-of-the-central-banking-awards-2015
  7. ^ (4 September 2014) Raghuram Rajan: 10 things to know about the new RBI governor NDTV, Retrieved 11 November 2014
  8. ^ Raman, Kripa (2 September 2013) The new Rajan Mumbai Mirror, Retrieved 11 November 2014
  9. ^ http://www.law.uchicago.edu/faculty/puri
  10. ^ Cite error: The named reference FinancialTimes was invoked but never defined (see the help page).
  11. ^ Cite error: The named reference Euromoney was invoked but never defined (see the help page).
  12. ^ "Mumbai marathon: Running for glory". http://indiatoday.intoday.in. Living Media India Limited. Retrieved 2 October 2015. {{cite web}}: External link in |website= (help)
  13. ^ a b Rajan, R.G.: Fault Lines: How Hidden Fractures Still Threaten the World Economy. Press.princeton.edu (2012-04-17). Retrieved on 2012-05-16.
  14. ^ Ovide, Shira (28 October 2010). "The Best Business Book of 2010: 'Fault Lines'". The Wall Street Journal.
  15. ^ Our Thinking. Goldman Sachs. Retrieved on 2012-05-16.
  16. ^ Business Book Of The Year Award 2010: Longlist announced for the Financial Times and Goldman Sachs | About us | FT.com. Aboutus.ft.com (2010-08-09). Retrieved on 2012-05-16.
Wikimedia Commons has media related to Raghuram Rajan.
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Business positions
Preceded by IMF Chief Economist
2003-07 		Succeeded by
Preceded by Chief Economic Adviser
2012–2013 		Succeeded by
Preceded by Governor of Reserve Bank of India
2013–present 		Incumbent

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