Business & Finance

Is Dr Rajan an economist?

The blame game between Manmohan Singh and Nirmala Sitharaman is one between two politicians and it is understandable, but that involving Dr Rajan is not.


A bitter war of words and blame game is on between the Finance Minister Nirmala Sitharaman, Dr. Raghuram Rajan, the former Reserve Bank governor and Manmohan Singh, our former PM. It all started with Dr Rajan’s hard-hitting speech and presentation while giving the O P Jindal lecture at the Brown University America, making a post mortem analysis of India’s economic slowdown and where he primarily blamed the Modi government for it. He was critical of BJP’s majoritarian rule and Modi’s authoritarian style, which he said is taking India down a dark and uncertain path. He called for an inclusive approach to India’s economic growth. It provoked a scathing response from the Finance Minister, who while addressing students at the Columbia University at New York said that government-owned banks in India, were subjected to their worst phase during the Manmohan Singh – Dr, Rajan tenure, and the losses suffered by them were so huge that they are still dependent on equity infusion from the government. She said that bank loans were given to cronies on phone calls during their era, which has left such a stink of corruption, that the government is cleaning it even today.


This lashing by Mrs Sitharaman provoked Dr Manmohan Singh, in turn, to hit back. Speaking at a press conference in Mumbai, he said that while there were weaknesses in the UPA regime during his tenure, yet five years in power is now sufficient time for the government to have learnt from their mistakes and provide a credible solution to the economy. The NDA must stop blaming the UPA. He said that if they had learnt from their mistake, the likes of Nirav Modi would not have managed to defraud banks and flee. He said that the Indian economy is in a vicious slowdown and that the BJP has not been able to correctly diagnose the problem and is thus unable to fix it. He said that the BJP governments at the Centre and at the states believe in fixing blame on the opponents rather than adopting people-oriented policies and that they are only interested in headline management than taking concrete steps. He said nothing has been done to create the 2 crore jobs and doubling of foreign investment that was promised. He said that the Indian economy has no hope of reaching the $5 trillion mark since it needs to grow at a rate of 10-12% as against the present growth rate of a more 6%. Dr Singh also said that due to the industrial slowdown, India has not been able to benefit from the demographic dividend.


Dr Singh’s severe criticism triggered yet another response from the FM, who is in Washington to attend the annual meeting at the IMF. She denied that she was indulging in any blame game as Dr Singh said, and was merely recalling what went wrongdoing a certain period, in order to put it in the right context. She said that she is being charged for not having a narrative on the economy and that she is making it clear.


While this war of words and blame game involving India’s present FM, former PM and a former RBI governor is most unfortunate, that too on foreign soil, there is a larger picture to it. The blame game between Manmohan Singh and Nirmala Sitharaman is one between two politicians and it is understandable, but that involving Dr Rajan is not. The potshots that Dr Rajan takes against Mr Modi and the government, clearly violate an unwritten code of conduct ie. those holding a post like that of the RBI governor, do not indulge in politics. By criticising Mr. Modi even when he was the RBI governor, where he was critical of the Make in India program, or his reference to Hitler and his Nazi government, while criticising Modi’s style of functioning at a lecture he gave in Goa on February 2015, he has violated this code that those holding public offices do not take political potshots at the government and if he wished to do so, as he did, he should have resigned as the RBI governor, which he did not. Even after his tenure got over, he has not moved on, as any economist RBI governor would do and never misses a chance of criticising the government, and increasingly with political undertones and content. As an economist, he talks politics and does also indulge in it, as he did by often criticising the Modi government in the run-up to the 2019 elections. It is time he came out of the closet of being a politician and accept his political ambitions or interests, for otherwise, he is clearly misleading the public by speaking as a politician under the garb of an economist. He thus takes the respect of an economist and avoids the criticism of a politician. He has moved on into politics for sure but has not come out in the open.


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