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The Curious Case of R3

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Chinmay S
Chinmay S
Nationalist, Writer,Marketer,Voracious reader,Investor and Arsenal fan


Raghuram Rajan or R3 as he’s called on social media is the current Governor of Reserve Bank of India. Prior to this he was appointed as the Chief Economic Adviser to the erstwhile UPA government for a brief period of 1 year.

Dr Raghuram Rajan- man with an intellectual pedigree, always had an illustrious career. He was the chief economist at the International Monetary Fund from 2003 to 2007, the youngest man ever to occupy the position. He was also a professor of finance at the University of Chicago Booth School of Business from 1991 to 2013, whereas his alma matter includes IIT Delhi, IIM Ahmedabad and MIT Sloan.

There’s no doubt about his capability to lead the central bank of India or the value the he would bring to any assignment he takes up.

Rajan’s relationship with BJP led NDA government

When Modi government came to power in May 2014, it was speculated that all the appointees of the previous regime will face axe. While the government did change the National Security advisor and the Principal Secretary to the PMO bringing in Ajit Doval and Nripendra Misra.  Dr Rajan stayed on his job.

Rajan enjoyed pretty much the same freedom that he did under the previous dispensation and never appeared to have been under any kind of duress while discharging his duties. He even made some comments to show government in poor light. Be it during the politically motivated Award Wapsi campaign on intolerance or for that matter speaking not so kind words on the performance of the Indian economy at International forums.

Controversy surrounding him?


Rajan’s position came in the eye of storm, the day BJP Rajya Sabha MP Dr.Subramanium Swamy called for his ouster.

Swamy was never known to have held Finance Minister Arun Jaitely or RBI governor Dr Rajan in high esteem. However since his nomination to the upper house of the parliament his attack against the RBI governor has escalated further

It is worth remembering that Subramanium Swamy is not Kejriwal to just shoot and scoot. He has the reputation of going against anybody only with proper reason and evidence to back him. Moreover he’s also known for taking cases to the logical conclusion. Dr Swamy wrote to the PM citing reasons why he wants Rajan out.

Here are some of the reasons to validate his argument, according to Swamy:

  • Rajan’s insistence on lowering the interest rates slower than what was demanded led to recession in the domestic small and medium industries and thereby causing not only a sharp decline in the output but also a massive unemployment of semi-skilled labour. As a Professor of Finance he ought to have known this would be the inevitable consequence of rising interest rate and hence his policy was willful and thus anti national in intent.
  • The RBI Act ruling out Sharia compliant financial institutions was re-affirmed by the RBI and Finance Ministry in their respective affidavits filed in the Kerala High Court in 2012, yet Dr. Rajan permitted Sharia complaint financial organizations to be set up in India, only for Prime Minister Modi to put a stay on it in December 2014
  • Rajan continues to hold on to his US Green Card which is essentially a transitional visa arrangement for acquiring US citizenship, and requires performing US military duties if called for by the US Government. Despite holding a sensitive and very high Government of India post, he has continued annually to renew his Green Card by making the mandatory trip for at least one day residence in USA. The RBI Governor post is very high in the Warrant of Precedence and requires a patriotic and unconditional commitment to our nation
  • As Governor of RBI, Dr. Rajan has sent confidential and sensitive financial information to various persons around the world on his University of Chicago unsecure personal email address: [email protected]. This is a reckless disregard of the national security interests of India
  • Despite being a government official he has been publicly disparaging of the BJP government. For example he has by innuendos in effect held our government responsible for the “climate of intolerance” in the country. In a Washington Meet recently he disparaged the growth rate of India as being equal to a “Aandho ke beech mein kaana Raja” (cockeyed person in the land of blind persons). Such pejorative sarcasm against the Government is a violation of the Rules governing public officials and conduct unbecoming of such an official.
  • Rajan is a member of the US dominated Group of 30 [www.]. From a close reading of the Group’s objectives it appears to be a group set up to defend US’s dominant position in the global economy. The way the booming Japanese economy crumbled in the 1997-98 East Asian Financial Crisis showed how the US Bond Market rates could trigger the crisis contagion across East Asia. This crisis led to US businesses buying into most of the collapsed Japanese companies. The US grip on the Japanese economy today is profound, in stark contrast to the reverse during the 1980s. This seems now also the modus operandi of Dr. Rajan in his strangulating the small and medium industries by untenably high interest rates.

Link to Swamy’s Letter to PM Narendra Modi is available below

The allegations by Dr Swamy do make a strong prima facie case against the continuation of Raghuram Rajan as RBI governor . The veracity of these charges could be proved only in the court of law.

What makes Dr Rajan’s saga intriguing?

The recent turn of events surrounding Dr Rajan seem to suggest that there’s more to this case than what meets the eye. There are some very interesting questions that come to mind.

  • Why Congress and the Intelligentsia is trying hard to impress upon the Government into retaining services of Dr Rajan? Almost every day we read OpEds or see some Senior Congress leader giving an interview on how Dr Rajan is the best thing to have happened to this country.

If you think that something is amiss here, wait there’s more in store.

  • Congress attributes the success of Indian economy amidst global uncertainties, to Dr Rajan’s impactful monetary policy.What doesn’t add up here is that, if Rajan is indeed so critical for the performance of Indian economy, then their rivals NDA would benefit largely by giving him extension. And if they don’t extend his services beyond Sept 16 then economy would suffer and the Government will face tough time getting re-elected in 2019, in short Congress would benefit. Why is Congress then so much against his ouster? When by their own  hypothesis it’s to the detrimental of their opponents.
  • Why Media and Congress are trying to create a false narrative that government is sacking R3 ? Dr Rajan took charge in September 2013 , his 3 year term comes to an end in Sep’16. Whether government continues with him or not is their own decision. Rarely in the past have we seen so much furore over the post of RBI governor. If we look into the history of RBI governors, only in about half of the cases services of RBI governors were extended.
  • Is Dr Rajan the only capable individual available in India to head the RBI ? Regardless of whether he still holds US Green Card or not, I doubt whether there’s any dearth of qualified people with requisite experience and skill sets in India to head the Central bank.

Above factors allude that the prospect of Dr Rajan’s removal as RBI governor has petrified Congress. Why else would Congress and some sections of media unleash all their energies to pressurize the government into granting him extension?

Post Script : In another letter written by Dr Swamy, R3 was alleged to have been shielding P Chidambaram and his son Karti on their Benami financial empire overseas. We will have to wait till September to see what transpires, but one thing that is clear here is that there is indeed something fishy.

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Chinmay S
Chinmay S
Nationalist, Writer,Marketer,Voracious reader,Investor and Arsenal fan
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