Many often refer to Dr Rangarajan as arguably a perfect partner at the central bank for Dr Manmohan Singh, who as the then finance minister was trying to steer the economy from a controlled setting to a more liberalised regime. Reminiscing on the years spent with Dr Manmohan Singh, Dr Rangarajan speaking to Financial Express says, “while Dr Manmohan Singh will go down in history as one of the best prime ministers, it was as a finance minister that he brought about the biggest change that India needed at that moment (1991).” To Dr Rangarajan, Dr Singh “demonstrated a courage and a vision to give it a shape. An important thing about him is that he carried with him all the people who worked with him and this essentially resulted in a significant change in the Indian economy.”
Dr Rangarajan, during his tenure at the RBI is often associated with the careful calibration of the monetary policy that was needed in those crucial years for the Indian economy. Every detail and attention to all aspects of financial and monetary management mattered. Be it around managing deficits, inflation or the exchange rate.
Looking back at his time with Dr Singh, Dr Rangarajan reminds that Dr Singh “believed in a consultative approach to policy formulation though he was the one to take the final decision,” while re-emphasising that he would “most certainly attribute ‘vision’ and ‘courage’ as the two elements that really defined Dr Manmohan Singh.
Dr Rangarajan spent a decade as a deputy governor at the Reserve Bank of India between 1982 and 1991 and subsequently as the governor of the central bank in the crucial years for the Indian economy between 1992 and 1997. Even the RBI refers to the years under Dr Rangarajan as a period that “saw unprecedented central bank activism to put in place a comprehensive set of measures to strengthen and improve the competitive efficiency of the financial sector.”