1. Raghuram Rajan’s extension as RBI governor to be decided toward end of his tenure: Report

Raghuram Rajan’s extension as RBI governor to be decided toward end of his tenure: Report

Raghuram Rajan has been under attack from some quarters in BJP, including its Rajya Sabha MP Subramanian Swamy

By: | New Delhi | Published: June 1, 2016 8:17 PM
Raghuram Rajan, RBI Raghuram Rajan has been under attack from some quarters in BJP, including its Rajya Sabha MP Subramanian Swamy (Express photo)

Amid continuing speculation on whether RBI Governor Raghuram Rajan will get an extension or not, a top Finance Ministry official today said there has been no discussion so far in this regard and his fate will be decided closer to the end of his current tenure in September.

Rajan, who was appointed by the previous UPA government for a three-year term that began on September 4, 2013, has been under attack from some quarters in BJP, including its Rajya Sabha MP Subramanian Swamy, for what they term as his failure to lower interest rates and boost economic growth.

A top Finance Ministry source, however, said no discussion has taken place in the government so far on whether to extend Rajan’s tenure or not.

His fate would be decided closer to the date, he indicated.

A former chief economist of the International Monetary Fund (IMF), Rajan is currently on leave from the Chicago Booth School of Business, where he holds the post of Distinguished Service Professor of Finance.

If denied an extension, he will be the first RBI Governor since 1992 to not have a five-year term.

His predecessors — D Subbarao (2008-2013), Y V Reddy (2003-2008), Bimal Jalan (1997-2003) and C Rangarajan (1992-1997) had five-year terms.

Rajan, who after taking over raised the short-term lending rate from 7.25 per cent to 8 per cent and retained the high rates throughout 2014, began the process of lowering the rates in January 2015. He has since then cut them 1.50 per cent to 6.50 per cent.

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