Raghuram Rajan- Messiah of the Economy


Raghuram Rajan

He came in when the rupee was plunging,

And Inflation was out of control,

Got the economy back and growing,

Because he played a messiah’s role.


Dr. Raghuram Rajan is not a new face in the community of well renowned Economists. Born on 3rd February, 1963, Rajan is the 23rd Governor of India’s apex banking institution; The Reserve Bank of India.

He took over the important role from D. Subbarao, the IAS officer-Economist who was struggling to keep the Indian currency and most importantly inflation, under the RBI’s control.

The inflation rate was as high as 10.70%, a rate at which no governor can get a good night’s sleep.

As soon as Rajan took over the helm at the central bank, he initiated many bold steps, the most popular and highly criticized being the increase in the Repo rate, the rate at which all the commercial banks borrow money from the RBI for short term needs. He repeated this stance of increasing the interest rates by 25 basis points almost 3-4 times in the 1-1.5 year period. His reasoning for the move being that inflation, measured by both consumer and wholesale prices have stayed out of the comfort zone of the central bank and only when these indices are under control, will he reduce the interest rates.

The corporate industry, trade associations, political parties, even the central government representatives showed disapproval of his stance. This happened because an increase in the Repo rate increased the cost of borrowing, making credit costly, thus reducing investment and growth.

But Rajan knew, if he had to bring down inflation and save the pockets of the common man, he had to stick to his decision. He was persistent and patient. He knew the positive results would come soon.

All good things take time to happen, and so did the prices to ease.

Due to the persistent effort of the governor to reduce prices, it did happen by the way of a remarkable reduction in both consumer and wholesale prices.

The inflation fell to tolerable rates of around 5%.

Now, after he got the interest rates under control, Rajan finally reduced the interest rates by 25 basis points, much to the joy of the business community.

The lessons that we can learn from this great man, is that we have to stay persistent when we know we are doing something beneficial, no matter how much criticism or disapprovals we face. Just remember all good efforts always bring positive results, its patience to wait for it, that matters.



Written by: Astha Juneja,



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Vanita Godwani
Hello, Vanita Godwani, a fybms student of Jaihind College,Mumbai..my hobbies are drawing and helping needy people.I loved being a social media correspondent at www.BMS.co.in .I am interested in pursuing by post graduation and later work in a multinational company being a honest and good high post official


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