Is Raghuram Rajan Moody’s agent in India? – S. Murlidharan

Raghuram Rajan

S. Murlidharan“Raghuram Rajan has clearly crossed the lakshman rekha [with his sanctimonious sermon at the Delhi IIT convocation ceremony]. He might have American pedigree, … and thus might have gone public with his empathy for the American rating agency, but he must realize that is not kosher. … He is as much a government servant as the Revenue Secretary or for that matter any other government employee. His job is to enunciate and implement monetary policy, period.” – S. Murlidharan

Moody's AnalyticsThe American credit rating agency Moody’s has advised India to mind the perceived, incipient problem of religious and cultural intolerance before it gets out of hand. Though it is clearly being influenced by the jaundiced eye views of a minuscule section of the Indian intelligentsia, it is exaggerating stray happenings as the orchestrated norm across the country.

The boot is on the other leg; it is these intellectuals who are being led by their collective noses. By whom? Well, no prizes for guessing.

The Modi government however cannot afford to be dismissive of Moody’s sanctimoniousness. Not even on the ground that the Ivy League rating agency should first hold the mirror to the government in its backyard, what with racial discrimination and gun culture fostered by right to gun feeding on each other to a devastating effect in some pockets of the USA off and on.

Because at the end of the day, India needs foreign capital and technology more even though foreign investors sift the grain from the chaff and are not always sold on what the rating agencies say. FDI and FII into India is not slackening despite the moody prognosis of Moody’s.

What has raised eyebrows and hackles alike is the Reserve Bank of India Governor Raghuram Rajan almost echoing Moody’s views while addressing Delhi IIT convocation ceremony.

The objections are both moral or propriety and technical. He is the RBI Governor first. That makes him a government appointee. There is a gag order on government servants from airing their views on the working of the government they are part of as a small or bigger cog in the wheel. Can the Revenue or Defence Secretary go to town with his views on the functioning of the department in particular or government in general?

The RBI Governor cannot afford to be sanctimonious or condescending. First he is as much a government servant as the Revenue Secretary or for that matter any other government employee. His job is to enunciate and implement monetary policy, period.

It is one thing for him to say “I am my own man” and reduce interest rates at his own pace as dictated by his assessment of inflation and money in circulation but entirely another to pontificate the government on matters not entrusted to him for oversight.

Finance Minister Arun Jaitley might have in the past snapped at Rajan’s heels to persuade him to bring down interest rates to spur the economy on its growth path but he never deigned to even remotely comment upon the rights and wrongs of his monetary policies. Rajan has clearly crossed the lakshman rekha or the Rubicon. He might have American pedigree, having spent long years in the US, and thus might have gone public with his empathy for the American rating agency but he must realize that is not kosher.

Law and order is a state subject. There is a view among the Modi detractors that his government is conniving with those waging low intensity communal attacks. Assuming there is some truth in this assessment, what prevents the non-BJP governments from coming down heavily on these anti-social elements?

It is significant to note these so-called mischief makers are quiet in the BJP ruled states.

The central government has not gagged anybody from airing their views. The press is free though a section of it is too free, and economical, with the truth. Yet, it would do well to counter the negative image of India sought to be projected by forces inimical to Modi in particular and the BJP in general.

While a publicity blitz would perfectly be in order, it must roll out economic reforms faster. If Karnataka with Congress government can think of doing away with the mandatory consent clause in its land acquisition law, there is no reason BJP ruled states should lag behind.

This should be done not only to speed up investments in their states but more importantly to drive home a larger message—Modi government was right when it proposed abolition of mandatory consent clause as well as social impact assessment clause in its aborted land acquisition bill for five specified types of projects. – FirstPost, 1 November 2015

» S. Murlidharan writes for FirstPost and other financial journals.

Raghuram Rajan Quote

  • See the letter Vishwa Hindu Parishad WP(E) Ashok Chowgule has written to RBI Governor Raghuram Rajan HERE (PDF)

4 Responses

  1. Government dismisses Moody’s warning to PM Modi, calls it opinion of junior analyst – Times of India – PTI – New Delhi – Nov 4, 2015

    NEW DELHI: The government on Wednesday dismissed a recent report quoted to Moody’s Analytics, saying it was the personal opinion of a junior analyst which was passed off as a commentary on India by a rating agency “by the media to buttress the narrative it wants to portray”.

    “It is with regret the government of India notes the irresponsible and distorted reporting by certain sections of the Indian media on what was the personal opinion of a junior associate economist employed with Moody’s Analytics,” an official release said.

    The report had on Friday said that Prime Minister Narendra Modi must keep the BJP members in check or risk “losing domestic and global credibility”.

    The release said, “It is surprising that sections of the Indian media failed to make a distinction between Moody’s Analytics which is merely a data and analytics firm and Moody’s Investor Services, which provides ratings services.

    “It is also surprising that no due diligence was done and the readers were not informed about the difference between Moody’s Analytics and Moody’s Investor Services.

    “Opinion of a junior associate economist employed with Moody’s Analytics has been splashed all across implying it as the opinion of Moody’s Analytics.”

    The report titled ‘Dismal Scientist – India outlook: Searching for Potential’ by its analyst Faraz Syed came on Friday in the name of Moody’s Analytics.

    The release said, “Government notes with distress that the personal opinion of a junior analyst was passed off as a commentary on India by a rating agency by the media to buttress the narrative it wants to portray.”

  2. Today,Sitaram Yechury has mentioned Raghuram Rajan’s being a supporter of the anti-tolerance campaign along with Mr.Narayana Murthy and Kran Majumdar Shaw.What A tragedy.They never spoke during the 1984 riots against Sikhs.

  3. Subramanian Swamy wants Raghuram Rajan to be sacked for his tolerance comments – Janta Ka Reporter – 1 November 2015

    BJP leader Subhramanian Swamy has reacted angrily on RBI governor Raghuram Rajan’s yesterday’s speech in IIT-Delhi at a convocation ceremony.

    Swamy said that he should go to the RBI and do his job and ‘shouldn’t speak like a grandfather.’

    Swamy said that Raghuram Rajan had made a mess of the RBI and the Prime Minister should sack him. “Tolerance of what? Tolerance of terrorism,” Sawamy asked.

    Yesterday, the RBI governer said that India had always protected debate and right to hold views.

    A day after Moody’s Analytics in a report said the belligerent provocation of various Indian minorities has raised ethnic tensions, governor also added that along with a possible increase in violence, the government will face stiffer opposition in the upper house as debate turns away from economic policy.

    Moody’s Analytics said the politics need to improve and the government’s reform agenda needs attention to achieve long-term growth.

    This is not the first time Swamy has demanded sacking of the RBI governor. In September, he had told a newspaper that Rajan’s removal was ‘long overdue.’

  4. It is a well known fact that some agencies always sabotage our efforts in technology advancement or to derail our economic advancement.

    The neo entrepreneurs will not appreciate this because of the free run they had especially in IT sector as it was in their interest and it grew with their blessings and actve encouragement.

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