Sunday, June 29, 2014

RBI Governor

Subramanian Swamy has demanded that Raghuram Rajan should be replaced as RBI Governor. His reasoning is a bit strange. We need to prove, he says, that India-educated economists are equally competent. He has suggested the name of Prof.R.Vaidyanathan of IIM, Bangalore. Vaidyanathan's recent book titled 'India Uninc' is well received in the market. He did his doctorate in IIM, Calcutta and has been teaching in IIM, Bangalore for a long time.

There is obviously no doubt about Vaidyanathan's credentials. But is it necessary to rock the RBI boat now? Narendra Modi is too much of a pragmatist to do that now. The IIM professor's views on many economic / banking issues are totally different from Rajan's. This is not strange since no two economists are expected to hold similar views.

Having said this, it is not necessary to trash Swamy's opinion. The government can take advantage of divergent thoughts by making Vaidyanathan a member of RBI board.

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