Nation Current Affairs 01 Jun 2016 Rajan ‘does not wa ...

Rajan ‘does not want 2nd term’ as RBI governor, Centre yet to take final call

Published Jun 1, 2016, 8:24 pm IST
Updated Jun 1, 2016, 8:45 pm IST
Finance Ministry sources say Raghuram Rajan’s fate will be decided by the govt towards the end of his tenure.
Union Finance Minister Arun Jaitley with RBI Governor Raghuram Rajan (Photo: AP)
 Union Finance Minister Arun Jaitley with RBI Governor Raghuram Rajan (Photo: AP)

New Delhi: Raghuram Rajan, the Governor of Reserve Bank of India has indicated that he does not want to continue in office for a second term after his tenure ends this year.

According to report in a regional daily, sources close to Rajan revealed that he has already informed the Central government that he would want to return to the United States after his term ends in September and that he wants to do research on the Indian economy at a University.


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While the RBI governor is yet to make any official statement on the matter, speculation is rife over whether he will get an extension or not. And a top Finance Ministry official on Wednesday 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 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.


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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.