No magic wand to wave away economic woes: Rajan

Rajan will replace Duvvuri Subbarao as the Governor on September 4

Faced with the declining value of the rupee and a widening current account deficit (CAD), Reserve Bank of India (RBI) governor-designate Raghuram Rajan on Monday said there was no magic wand to address the challenges before the country overnight and he would endeavour to deal with them one at a time.

Rajan, 50, who has been in the finance ministry as chief economic advisor for barely a year, will replace Duvvuri Subbarao as RBI governor. Subbarao demits office on September 4.

“We have enough ideas,” said Rajan. “It is not just the currency, it is financial inclusion, it is growth. I think there is a lot to do. There are challenges in the economy.... These things are not going to be overcome overnight. There is no magic wand. But there are undoubtedly solutions to many of the problems that the RBI can tackle and the job is to go ahead and do it,” he told reporters on his last day of office at the finance ministry.

“We will do it one step at a time. Make sure that it progresses everyday.”

“Expectations are challenging. I think the job is a coomplex one. There are many issues including managing institution itself.... I think in some ways there are commonalties among bureaucracies but each organisation has its own culture, has its own tempo... I am looking forward,” he said.

Rajan was appointed as the chief economic advisor in the finance ministry in August last year.