RBI governor Dr. Raghuram Rajan's decision not to seek a second term was disclosed by himself , but it's announcement came at a crucial time when the world market were at its worst jittery level. And the bigger surprise remained as it negated the idea that his relations with the Modi government had settled on an even keel after prolonged friction over interest rates and Rajan's breezy comments on NDA's ambitious projects like Make in India.
Not long before Raghuram Rajan had quipped that it would be cruel to spoil the fun the media was having speculating whether he was going to stay on in his post after his term ended on September 4. "You will know when there is news," he laughed. But the news broke by him only within a week on Saturday, June 18, when the RBI released his statement "On due reflection and after consultation with the government, I will be returning to academia when my terms as Governor ends on June 4, 2016".
And the timing of the announcement was crucial, just on the eve of a hard Brexit event, that forced many to speculate that this will cause great turmoil in Indian market, even fearing stock exchange will crash hugely in sympathy of RRexit. But nothing happened like that, even market rejoiced in rising by 1%, on the news of reforms in FDI, in many important sectors. Was it a ploy that misfired, with "Politics trumps on Rajanomics" soon becoming the trending line on social media.
Rajan's relations with the government and the behind the scenes actions remain ed subject of big speculation for the entire weekend. The question was raised, if Rajan's job profile as an economic servant see him overstepping the traditional confines of his office?
Rajan was appointed by UPA government in 2013 in difficult time and he survived another two years under Modi regime with grace and liberty, but our poitical partisan ism called for predictable crude political reactions; the Congress,Left and the so-called liberals, on one side praising him sky high and the other side those like Swamy even challenging his integrity.
The theory gains ground that Rajan’s alleged ouster are based less on differing of perceptions on economic issues between the Governor and the Government and more on their perceived political incompatibilities. And that inspired or rather conspired the making of the story, "Ploy to club RRexit with Brexit failed to score political goal against Modi Government, nullified by the news of FDI reforms on the day ".
Many in the RBI say that contrary to the ongoing media reports and what the politicians in opposition say, the Modi government has been extremely fair to Rajan and allowed him to have the last word on the monetary policy of the country.
Yes at times there have been animated discussions between the officials in the Finance Ministry and those of the RBI over the anti-inflationary measures – such as cuts in rates of interests – but ultimately the views of Rajan have prevailed, with both Modi and Finance Minister Arun Jaitley standing by him.