The Leaderboard profiles the people behind the policies of the Asia-Pacific. This post features Raghuram Rajan the new chief economic adviser to the government of the Republic of India.
Who is he?
Raghuram Rajan is a former chief economist at the International Monetary Fund and a professor of finance at the University of Chicago’s Booth School of Business. He is known for his warnings in 2005 about the approaching financial crisis and is an outspoken critic of corruption, inefficiency, and populism in politics as damaging to India’s economy. Mr. Rajan is also the author of the Financial Times/Goldman Sachs 2010 book of the year, Fault Lines, an account of the sub-prime crisis.
Why is he in the news?
Mr. Rajan is in the news because he was just appointed as India’s chief economic adviser. He replaces Kaushik Basu, who will now be at Cornell University, and joins an incoming team under returning Finance Minister P. Chidambaram. This position comes with significant policy influence, but not a lot of explicitly designated power. It also comes at a time when the government is struggling to revitalize reforms that will increase foreign capital flows and cut the country’s fiscal deficits.
What should we expect from him?
Based on his previous writings, we can expect Mr. Rajan to push for increased foreign direct investment, anti-corruption legislation, and a possible easing of regulatory moves that have thus far limited foreign investment. The Reserve Bank of India (RBI) should expect continued scrutiny from Mr. Rajan, since he believes that the RBI is complicit in high government borrowing- a claim the RBI has already denied. Mr. Rajan is a fresh voice for change and his appointment is a signal that the Prime Minister Singh and Finance Minister Chidambaram are serious about addressing the concerns of foreign and domestic investors.