Raghuram Rajan—The teacher & his musings

Rajan may be the RBI governor, but the love for interacting with students hasn’t left him


A file photo of RBI governor Raghuram Rajan. Photo: Abhijit Bhatlekar/Mint
A file photo of RBI governor Raghuram Rajan. Photo: Abhijit Bhatlekar/Mint

Once a teacher. Always a teacher.

Raghuram Rajan may be the governor of the Reserve Bank of India (RBI), but the love for interacting with students hasn’t left him.

Rajan, who was a professor at the University of Chicago Booth School before moving to India in 2012, appears to have made a special effort to make time for interactions with students. Tough for a man who is managing monetary policy and regulating the financial sector in an economy as large and complex as India’s.

RBI has tried to ensure that the governor’s interactions with students are closed to media so he can speak candidly. But in today’s hyper-connected world, that’s difficult. And so Rajan’s interactions with students have often given the world insights into his thinking. And in some cases, caused some confusion.

The latest video clip to surface is that of an 8th class boy essentially asking the governor—we worry so much about policies of the US but when will we see Indian policies affecting the world so intensely?

Rajan couldn’t help but crack a smile but he responded seriously.

“I have been saying that the US should worry about the effect of its policies on the rest of the world. So if I stood by that we should not be very happy, down the line, when Indian policies affect the rest of the world adversely. We would like to live in a world where countries take into account the effect of their policies and do what is right broadly...” said Rajan.

Rajan went on to tell the student that India may get to that point by the time the student is old enough to get a job.

This is not the first time Rajan’s interaction with students has drawn interest and, in some cases, caused controversy.

A few months back, in a student interaction in Pune, Rajan reportedly said that India could achieve full capital account convertibility in a “short number of years.”

A wide public debate followed. The government’s ministers weighed in. Numerous editorials were written. Markets took note.

Rajan eventually clarified that by a “short number of years” he meant at least 5-10 years. End of story.

There’s more. And this one had the market grumbling.

Back in March, Rajan was quoted as telling students that RBI could not cut rates because inflation is high. Markets took note.

Except a day later Rajan actually went ahead and cut rates. On a conference call following the rate cut, miffed analysts asked why they had been misled. Rajan said he was quoted “out of context”

He explained that he was comparing India to international central banks that had brought interest rates down to zero, which India could not do because of the level of inflation in the economy.

Moral of the story—next time you come across a Rajan comment on social media emerging from a student interaction, remember that he is probably speaking with his teacher’s cap on rather than the RBI governor’s.

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