[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]D[/dropcap]uring an interview to the Wall Street Journal (WSJ), the Prime Minister was asked about his thoughts on the reappointment of RBI Governor. Mr. Modi politely told the paper that it was an administrative matter, should be of no interest to media and that it is months away. As September approaches, there will be enormous pressure from the “Davos crowd” to give Mr. Raghuram Rajan an extension. For country’s sake, the Prime Minister must look the other way.
Who are the “Davos Men and Women”? Back in 2004, renowned Harvard University social scientist Mr. Samuel Huntington (Dead Souls: The Denationalization of the American Elite) coined the term “Davos Man” referring to a group of elites who met annually in a gathering at the World Economic Forum (WEF) in the now famous chalet town of Davos on the Swiss Alps to discuss global problems and find solutions. He concluded that a “Davos Man” considered himself to be a trans-nationalist, in other words a global citizen with no allegiance to national identity. More importantly, he surmised that their sole aim is to facilitate and promote their interests while being completely disconnected with concerns of common citizens.
Ever since the renowned economist and BJP Member of Parliament Dr. Subramanian Swamy wrote a letter to the Prime Minister asking him to relieve the Reserve Bank of India (RBI) Governor of his duties, the “Davos crowd” has gone berserk on all media outlets. The latest defense of Mr. Raghuram Rajan comes from a British newspaper which certainly bats for the trans-nationalists. In a column on May 29th, its New Delhi Correspondent calls the RBI Governor “a near-hero to international investors” and goes on to claim that the exit of Mr. Rajan could send ripples across Foreign Institutional Investors and that it will severely hamper inflow of funds. It also warns of dire consequences for the Indian economy should Mr. Rajan be replaced which is indeed a bizarre and perplexing claim. Not to be left behind, India’s own “Davos Men and Women” have a new found affection for the Governor. Industry captains who are seen year after year at the WEF annual event want Mr. Rajan to continue while opinions of the most important segment, Heads of MSME’s, are either ignored or not known.
[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]M[/dropcap]any of his supporters like him to oversee banking reform that he is supposed to have started a few months ago by asking Banks to make provisions for bad loans. But as Governor, Mr. Rajan is yet to articulate a plan for transforming Indian Banking system. Moreover, he was silent as Chief Economic Advisor to the Prime Minister and later to the Finance Ministry when crony socialism was rampant in the banking system. As a banking regulator, RBI under Mr. Rajan has been even more of a disaster. He slept at the wheels for a good two years when both public and private sector banks were ever-greening assets. And on the all important issue of black money, RBI is yet to offer any out-of-the-box solution. Nor it punished the banks that were involved in the Cobra Post sting operation.
The Davos crowd will raise many intangibles like global credibility, independence of Central Bank, reputation of RBI etc. to keep Mr. Rajan in the job. But the RBI Governor must be judged on his performance and not on his pedigree and global credentials. And the Prime Minister must be wary of the open lobbying from captains of the industry as well as the influential voices in international media. As Mr. Huntington rightly points out, the Davos crowd gives primacy to their own interests over the well being of the country and they are as toxic as Lutyens Delhi. It will be wise for the Prime Minister to replace Mr. Rajan at the helm of RBI with a man or woman who is more in tune with the agenda of the government than risk someone who will not hesitate to criticize the government at the first instance.
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