New RBI head has tough job on hand: IIM-A faculty members

Chairman of board of IIM Ahmedabad says Rajan most appropriate person to guide India's monetary policy through current turbulent times

The mood at the Indian Institute of Management, Ahmedabad (IIM-A) is festive, with one of its alumnii, Raghuram Rajan taking over as the next Reserve Bank of India (RBI) governor. At the same time, faculty members warn Rajan has a tough job to salvage the sagging economy at turbulent time.

“I am pleased an alumnus of the institute has been selected as RBI governor. Rajan has impeccable academic credentials and global experience which are well suited to his role as RBI Governor in a world of increasingly interconnected economies,” said A M Naik, chairman of the board of IIM-A.

Naik says Rajan is the most appropriate person to guide India’s monetary policy through the current turbulent times the global economy is facing.

Samir Barua, former director of the institute, says Rajan’s job is cut out, especially in the backdrop of a falling rupee and an economy which is going nowhere.

“India needs to be able to achieve a high growth rate while keeping inflation in check. I think Rajan’s short stint as economic advisor would help him appreciate the dynamics of working in such top positions in India. His appointment is a matter of great pride for IIM-A,” said Barua.

An IIM-A alumnus, Barua has been taught by former RBI governor C Rangarajan at the campus.

In turn, Barua went on to teach Rajan during the latter’s stint at the IIM-A campus as part of the 1985-87 batch.

“While Prof. Rangarajan taught me, I got to teach Raghuram Rajan years later. I remember him as an outstanding student who could combine rigorous analysis with the ability to interpret the results of such analysis for effective implementation. He is an excellent choice as RBI governor,” said Barua.

Sebastian Morris, another senior faculty member, says Rajan is coming to RBI at a very tough time. “I hope he will be successful in salvaging the situation although it is extremely difficult right now. What has been handed over to him is an extremely difficult scenario. But one hopes he will be able to take us out of it safely,” says Morris.

Other faculty members say Rajan is the right choice for the top job as the banking regulator. “Rajan not only has knowledge but also an appropriate and relevant experience required to handle this kind of a job. I remember interacting with him when he was the chief guest once at one of our convocations some years ago. What struck me was his humility. One can easily connect with Rajan and will surely find him unassuming,” says B H Jajoo, former dean at the institute.

Another senior faculty member who also taught during Rajan’s batch, G Raghuram says, “Rajan’s appointment just goes on to show that our alumni have not only made it in the commercial arena but also have been exemplary in the domain of government policy.”

“Rajan was pretty well known in academic circles, especially in finance. We would like him to succeed and hope he will square up to the economic challenges in front of him,” says Ajay Pandey, acting director and dean - faculty at IIM-A.