We, the people of India, are on the cusp of history. The tipping point is the re-appointment of Raghuram Rajan as Reserve Bank of India Governor: if the Narendra Modi government reposes its faith in him by giving him another term, redemption is possible; otherwise, apocalypse awaits us.
Or so we are supposed to believe.
Writing in The Times Of India (June 5), Swaminathan S. Anklesaria Aiyar enlightens us about the imminent doom in an article, ‘If Rajan exits, so will billions in investment.’ According to Aiyar, “If Rajan is asked to leave, India will suffer a mass exodus of foreign portfolio investment. Tens of billions of dollars will flow out, maybe as much as 100 billion (if this coincides with some other bad news like a further Chinese slowdown or British exit from the European Union). The stock markets will crash and the currency markets will panic. India will be bruised severely. Those wanting Rajan’s exit need to understand the consequences of what they wish for.”
It’s not just that. The index of industrial production, which has just started showing some buoyancy, will slump hopelessly. Tens of thousands of businessmen will be ruined; bad debts of banks, already very high, will go skywards; millions of employees will lose jobs.
If Rajan exits, the laggard farm sector will suffer more. It will continue to shrink without the great work the RBI is doing under the Munificent and Magnificent Rajan.
All progress on the infrastructure front will come to a halt. It is true that the government is devising new policies and programmes to boost investment, clear procedural bottlenecks, and expedite environmental approvals in the sector. Road-building has gained momentum under Nitin Gadkari; efforts are on to galvanize Indian Railways; ports and maritime trade have attracted the government’s attention; civil aviation is being promoted. All this is good, but without Rajan everything would come to naught.
There has been some progress on the fiscal and current account fronts. The fiscal deficit is being reined in, primarily because of cheap oil. Current account deficit, at 1.5 per cent, is also in the comfort zone. All this will change for the worse if Rajan leaves.
That is not all. If Rajan exits, monsoons will fail in India. Polar and Himalayan glaciers will melt. For he is the Indian Atlas, holding the entire economy on his shoulders. Imagine the catastrophe all of us would face if he, taking a cue from Ayn Rand, decides to shrug! Or, still worse, the Modi regime doesn’t give him another term at the central bank!
This is the impression that one gets reading about views expressed in the media and public arena. The Times Of India, in particular, enamored with Rajan; its columnists have transformed him into a demigod. The reaction of Shobha De, when he was appointed RBI Governor, was undoubtedly orgasmic: “The guy’s put ‘sex’ back into the limp Sensex. That makes him seriously hot… his chiseled features are as sharp as his brain… the Ranbir Kapoor of Banking” (September 13, 2013).
And she concluded with some kind of ironic counsel: “Make sure you don’t drop that towel, like Ranbir Kapoor did in Sawaariya. On the other hand… aahhhhh… wishful thinking!”
There is something about Rajan that occasions orgasms and paroxysms among his admirers. Unsurprisingly, the crescendo for his re-appointment rises by the day.