Prime Minister Manmohan Singh has inducted another thinking cap into his economic policy-making team that is actively working towards a blueprint to cushion the domestic economy from the impact of the global credit crisis. Raghuram G Rajan, former chief economist at the International Monetary Fund was appointed on Monday as the honorary economic adviser to the Prime Minister.
?Dr Rajan will hold the rank and status of secretary to the Government of India,? a release from the PM?s office announced. Apart from Rajan, finance minister P Chidambaram, deputy chairman of the Planning Commission Montek Singh Ahluwalia and the Economic Advisory Council headed by Suresh Tendulkar form a part of the core team, which has been assisting the PM in dealing with the financial sector crisis.
Rajan is currently a professor of finance at University of Chicago ?s Graduate Business School . But he has been actively associated with setting the agenda for development of the country?s financial sector and also headed a committee on the financial sector reforms.
Among other things, the Raghuram Rajan Committee on Financial Sector Reforms in its report submitted in September this year has pressed for more foreign flows into the bond markets and reworking of the regulatory landscape with fewer regulators.
The committee had also opposed capital controls and had suggested opening up of the rupee bond market and permitting foreign investors to play a bigger role. It had also called for a liberal approach on outflows, such as allowing insurance companies and provident fund to invest abroad.
The report had however cautioned that the timing of the reforms is critical. ?Clearly, there is little urgency for reforms because India is not in a crisis,? it had pointed out.
Rajan has also taught at Northwestern University , MIT, and the Stockholm School of Economics. He has also worked as for the Indian finance ministry, World Bank, Federal Reserve Board, Swedish Parliamentary Commission, and various other financial institutions.