Rajan’s theme: Change with continuity - Dr.N.A.Mujumdar

........With his outstanding academic record, Raghuram Rajan is expected to adopt a fresh approach to Indian problems. But we must remember that the milieu in which he is operating today is quite different from the milieu of advanced economies. His September 4 speech clearly demonstrates that his feet are firmly on Indian soil. The macro dimensions of his speech do not seem to have been adequately appreciated. The underlying theme of his speech can be summed up as: ‘ Changes with continuity.’ There is no abrupt break with the Reserve Bank’s (RBI) traditions or inherited wisdom. This can be demonstrated with reference to the three aspects of his speech: Multiple objectives of the central bank, micromanagement of credit and the use of modern technology to facilitate more efficient delivery of financial products. The totality of his speech, though brief, reflects Rajan’s broad philosophy of central banking...........

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