The Possibility of Raghuram Rajan as RBI Governor for a Second Term

The question of whether Mr. Raghuram Rajan can become the Governor of the Reserve Bank of India (RBI) for a second term has been a subject of much speculation. While he is technically eligible and the government can ask him to join, the likelihood of him accepting such a role is currently low.

Speculation on Rajan's Future Involvement

It is widely believed that Rajan would not like to serve as the RBI Governor again. After his tenure from 2013 to 2016, many wonder if he would be available for another term. His previous role as the Secretary in the Government of India suggests that he may be willing to serve the nation in different capacities. However, his outspoken nature and strong convictions could pose challenges for his reappointment, especially in the current political climate.

There is a notable speculation on whether Rajan would formally return to a role in the Government of India, possibly as a Finance Minister. While his expertise and experience would be invaluable, the current political environment raises doubts about the feasibility of such a move.

Suitability of Rajan Under the Current Government

The current government's inclination towards selecting candidates who align closely with their ideology makes it difficult for Rajan to be reappointed as the RBI Governor. His tenure as the Governor coincided with the UPA government, and the selection was a well-thought-out choice. However, the NDA government, having a different vision, may not be inclined to nominate him again.

Despite the potential for Rajan to serve as the RBI Governor, his outspoken nature and well-communicated intentions make it unlikely that he would remain in a political position that requires compromise and flexibility. Rajan has always been known for his principled approach and for not deviating from his core beliefs. This consistency in his stance presents significant challenges to reappointing him in a government role.

Political and Financial Considerations

The political climate is a crucial factor in Rajan's potential reappointment. The Gingliva Excel IPO controversy and the decision to keep Urjit Patel as the RBI Governor in 2016 highlight the government's priorities. These decisions were made not only due to financial expertise but also for aligning with political objectives.

The current government values candidates who share their vision and values. Rajan's independence and his outspoken views on various financial and economic issues may not align well with their priorities. The fact that he openly declared his stance to leave the RBI when his term ended further emphasizes his unwillingness to compromise his principles to serve in a different capacity.

Conclusion

While Raghuram Rajan's technical eligibility and expertise make him a strong candidate for the role of RBI Governor, the current political environment presents significant challenges. The possibility of him serving a second term is currently low, despite his vast experience and capabilities.