Raghuram Rajan’s inglorious exit shows Modi’s weakness
The RBI governor, with his impeccable credentials, had embarked on
his own version of Swach Bharat - cleaning up the banking mess.
POLITICS|
5-minute read | 19-06-2016
The decision of Dr
Raghuram Rajan to quit at the end of his tenure as the top honcho of the
Reserve Bank of India can be interpreted in many ways. I am not one of the votaries
to say that without Rajan at the helm the RBI would come to a grinding halt.
Indian economy is too big
to be managed by a lone chief heading the nation’s central bank; but the RBI
chief adds credibility to Modi’s growth story. And this is what Rajan did with
his impeccable credentials by embarking on his own version of Swach Bharat -
cleaning up the banking mess.
But India would
definitely miss Rajan’s unique ability to read the macroeconomic indicators to forecast
any looming doom. Dr Rajan gained global recognition when he foresaw the US
economic downturn three years in advance, though it was pooh-poohed at that
time.
And probably this was the
reason Dr Manmohan Singh brought him towards the fag end of his tenure as prime
minister when the economy was on a free fall and the banks were on the brink of
collapse.
So it is not going to be
easy for Rajan’s successor to establish himself in his new job and convince the
stakeholders that he can do better than Rajan. The Modi government could face
its fall out in the coming months.
But the way Dr Rajan’s
decision to quit came about showed up the flaws in Prime Minister Narendra
Modi’s leadership style. The singular lack of finesse in handling it reflected
Modi’s inability or reluctance to defuse potentially embarrassing situations that
reflect poor governance.
Is it a leadership flaw
or does it reflect Modi’s difficulties in managing the BJP leadership, which
seem to be bent upon creating more embarrassing situations for the Prime Minister?
In fact it seems to be helping the desperate Congress opposition more
opportunities to flog the ruling party.
Some of the government
appointees, probably chosen more for their loyalty to the party than ability,
have brought more embarrassment than glory to both their jobs and the
government with their lack of finesse in handling developing crises situations.
We saw it in the Film and
Television Institute and the Central Board of Film Certification; probably we will
be seeing it again in the National Institute of Fashion Technology (NIFT)
following the appointment of Chetan Chauhan, a former test cricketer and
two-time BJP MP as chairman.
This shows despite all
the talk of national vision, BJP like the Congress, seems to be looking at all
issues only in narrow political perspective.
As the Prime Minister,
Modi has every right to decide upon the appointment of RBI governor. There is
nothing wrong if he felt there was a need to replace Rajan at the end of his
tenure because ultimately the buck stops on the PM’s table.
Modi, one of the most
articulate leaders India ever had who is usually vociferous on many issues, kept
mum when the one-man demolition army Subramanian Swamy demanded the sacking of
Rajan and went to town questioning his integrity. So it would be logical to
conclude that Modi probably wanted to replace Rajan.
But it is disappointing
to see Modi not coming out in public against the character assassination of Rajan,
who as the governor of the RBI was trying in his own way to realise the PM’s
development narrative.
Had Modi done so, it would
have only added to his public esteem and credibility as a leader who stands by
those who serve him in good faith.
The job of selecting the
next RBI governor has been entrusted to a committee headed by the Cabinet
Secretary. It is not clear whether it reflects the PM’s lack of confidence in
decision making or spreading the responsibility for an important decision to
his team?
Both are understandable
as a PM cannot be an expert in every field to do the right thing every time. But
to do so reflects the ability to discern critical issues. Does Modi consider
the appointment of the right man as RBI governor as critical to his development
story?
I remember a faux pas by
another forceful and articulate PM: Indira Gandhi. She had difficulty in
picking the grain from the chaff; her 20-point programme promoted with a lot of
fanfare forty years ago during emergency is a prime example.
It was a snake oil salesman’s
concoction based on the profound observation of Barnum (of the famous Ringling
brothers circus Barnum and Bailey). He said “there is a sucker born every
minute.”
Indira Gandhi’s 20-point
programme was to sell her socialist ways; it mixed the mundane with the absurd and
included raising the income tax exemption limit to Rs 8000 from Rs 6,500,
confiscation of properties of smugglers and steps to bring down prices of
essential commodities.
At that time the ministry
of defence in its enthusiasm to promote the programme asked the Army to brief
the soldiers about it every day. It
reached ridiculous levels when as I as commanding officer had the thankless
task of explaining the 20-point programme to my troops.
When I was having a tough
time hemming and hawing on it in my bad Hindi, I was left speechless when a
jawan asked me how any reduction of income tax or confiscating property of
smugglers will affect him or his family living in rural Rajasthan.
Raghuram Rajan probably had
little option than to quit after the loud silence from the government and BJP
leadership when the media went to town with Swamy's serial fusillades against
the RBI governor.
It was his honourable way of saying ‘thank you, enough is enough’’ to the Modi government. But his slightly inglorious exit shows that India and Modi still lack finesse in governance and in doing things gracefully.
It was his honourable way of saying ‘thank you, enough is enough’’ to the Modi government. But his slightly inglorious exit shows that India and Modi still lack finesse in governance and in doing things gracefully.
Courtesy: India Today
opinion portal DailyO
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