Wednesday November 21, 2018
Home Business Fear Of Econo...

Fear Of Economic Volatility Raises as RBI Governor Decides To Resign

There has been widespread speculation that Rajan quit because of what some termed as “discouraging signals” from the government.

1
//
Image Source: Financial Express
Republish
Reprint
  • India is now the world’s fastest-growing major economy
  • Raghuram Rajan helped stabilize India’s currency when the rupee was plunging and inflation was raging
  • Praising Rajan’s contribution, Finance Minister Arun Jaitley expressed confidence his successor will be a “good person”

The Indian Central Bank governor’s decision not to seek a second term in office has raised concerns the country could face a loss in investor confidence and economic volatility. The widely-respected economist, Raghuram Rajan, is credited with making an important contribution to India’s economic turnaround after a choppy phase.In a signal of uncertainty looming ahead of his departure in September, the rupee fell to a one-month low Monday.

Rajan’s departure: not a big surprise

Rajan’s weekend announcement to quit came after weeks of speculation on whether the government will renew his tenure as head of the Reserve Bank of India (RBI). In a letter to his staff, Rajan said he had been open to staying on to see through the reforms he had begun, but that “on due reflection and after consultation with the government,” he was returning to his “ultimate home in the realm of ideas.”

Widely feted as one of the world’s best Central Bank governors, the former International Monetary Bank economist helped stabilize India’s currency when the rupee was plunging and inflation was raging. As growth momentum returned, the country regained credibility among international investors, who had turned their back on emerging economies.

India’s economy is soaring

While countries like Brazil and Russia continue to face hard times, India is now the world’s fastest-growing major economy.

Finance Minister Arun Jaitley sought to calm investors Monday telling a television network “the country’s economy is driven by strong fundamental factors.” Praising Rajan’s contribution, he expressed confidence his successor will be a “good person.”

Finance Minister Arun Jaitley speaks to RBI Governor Raghuram Rajan during a convocation ceremony for students at a university in Mumbai on January 9, 2015 Image Source: NDTV Profit

Follow NewsGram on Twitter: @NewsGram1

Symbol of stability

The head of emerging market economics at JP Morgan, Jahangir Aziz, stressed that Rajan was a symbol of stability for many investors. “They have invested on the fact that India has managed to put together a reasonably strong story of macro-economic stability. Many of them associate that in part to the Reserve Bank of India, Raghuram Rajan.”

Aziz said investors will watch to see whom the government appoints as Rajan’s successor and would like to see continuity in policies. “The need of the hour is to calm down market nerves,” he says.

There has been widespread speculation that Rajan quit because of what some termed as “discouraging signals” from the government.

Follow NewsGram on Facebook: NewsGram

There was criticism of Rajan

Rajan was not without his critics, who said his refusal to slash interest rates, and a clean-up of bad loans he was pushing at state-owned banks, were choking private investment. The most vocal attack came from a member of the ruling Bharatiya Janata Party, Subramaniam Swamy, who raised eyebrows with his comment that Rajan was “mentally not fully Indian” and complained that he had not acted to ease the heavy debt burden of many Indian companies.

Although India’s economy is growing at over 7 percent and has overtaken China as the world’s fastest growing economy, Rajan has repeatedly cautioned that India’s economic recovery still rests on fragile foundations.

Economist Rajiv Kumar at New Delhi’s Center for Policy Research said fears about the impact of Rajan’s exit could be overblown and pointed out that stock markets did not tank Monday as many had feared. “It’s institutions that matter, and the RBI has known to be a very competent institution with huge inherent strengths,” says Kumar.

Meanwhile, the government ushered in more economic reforms Monday, announcing sweeping changes to rules on foreign direct investment by opening up its defense and civil aviation sectors to complete outside ownership, and loosening some restrictions on the pharmaceutical and retail sectors.(Source :VOA)

ALSO READ: 

Click here for reuse options!
Copyright 2016 NewsGram

  • Vrushali Mahajan

    This is really sad to know. Rajan has helped the Indian economy soar high. He is a man with ambition and great personality. Also, IMF says India would outspace China’s slowing economy. So, this should be looked after.

Next Story

Religions For Peace Organisation Promotes Interfaith Forum

Mr Vijai Singhal explained to everyone about Eat Less Meat project.

0
Different religions in India, wikimedia

Religions for Peace (RfP) is an organization representing religious leaders of different faiths in Australia and includes Christians, Jews, Muslims, Buddhists, Hindus and Bahai faith. Hindu Council of Australia has been a member, represented by its director Vijai Singhal for over a decade now.

According to RfP founder, this Interfaith forum is different from others. Apart from meetings and speeches, it tries to connect individual faith leaders together in a bond of friendship which is best manifested by leaders of different faiths become personal friends. She cited as an example of a christian member whose daughter’s wedding was attended by and blessed by Muslims, Jews and from other faiths.

Anti-Hate laws in NSW

High on its agenda was an anti-hate and anti-discrimination law being considered by the state of NSW. Phillip Ruddock, former Attorney General of Australia and now Mayor of Hornsby shire has held wide consultations with community and submitted a report. Ian Lacey, a lawyer explained to members that Australian constitution in 1901 has included a clause on freedom of religions which means that :

religions
RfP held a meeting on 19th November 2018 to discuss various issues.
  1. Government can not establish a religion
  2. Government can not enforce a religion
  3. Government can not stop a religion and
  4. Government can not ask for a religious qualifications for a job

This, he explained, provides freedom of religion to all Australians.

Various states like Victoria and Queensland have enacted Vilification or anti-hate laws which are not working very well. He feared that NSW should not follow their path and instead enact a robust law like that in Britain which

  1. Allows people to criticize a religion but
  2. Does not allow adherents of a religion to be discriminated

He further explained that stopping people from criticizing religions can have the opposite effect of becoming a blasphemy law.  We all know how some fundamentalists regimes have enacted blasphemy laws and have used them to prosecute and impose a certain religion.

Jatayu earth centre

Robert from Vedanta society explained his recent visit to India and a “Jatayu earth centre” being established there.

Religions
Parliament of World’s Religions 1893.

Parliament of World’s Religions

Father Patrick and Rachelle Kahn who recently returned from Parliament of World’s Religions held in Toronto briefed about their impressions of the visit.  The first Parliament was held in 1893 where Swami Vivekanand had given his first now world famous address starting with “Brothers and Sisters” instead of the usual “Ladies and Gentlemen” salutation of the time.

The next Parliament was held a 100 years later in 1993 and is now an annual affair. The representation was very wide spread with 7,500 people, from 80 countries, 222 religions and over 500 workshops. However, the depth of religious fervor was very shallow.

Also Read: AAP Welcomes BJP’s Stand on Inter-Faith Marriages

Eat Less Meat

Mr Vijai Singhal explained to everyone about Eat Less Meat project in which Hindu Council has joined with ARRCC (Australian Religious Response to Climate Change).

(Hindu Council of Australia)