Steep learning curve ahead for next RBI Governor Raghuram Rajan

.....In an era when the credibility of almost every institution here has been eroded, Rajan has the unenviable task of leaning against the government to protect India's central bank. Despite its flaws, the RBI is still seen as an institution that is uncompromising — be it with interest rates, banking regulation, currency or even bank licences. Rajan, who will be India's youngest central bank Governor, will take over at a time when the communication between the government and Mint Street's top man has almost broken down. Only a rupee collapse helped a patch up. Finance minister Chidambaram and Governor Subbarao have had public spats in the past few months, which has not helped anyone's cause. The foremost task is to be on the same page, but that will be inviting trouble for Rajan's credibility if the government continues with its imprudent policies...........

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