Govt gives ear to investor concerns, considers Raghuram Rajan's second term, say reports

The speculations around RBI governor Raghuram Rajan's reappointment refuse to cease. But, according to a recent report, Prime Minister Narendra Modi and Finance Minister Arun Jaitley are keen on retaining him as the chief of the central bank.

"The government is likely to offer extension to RBI Governor Raghuram Rajan and the decision will be taken closer to August," ET Now reportedly said citing its sources in the government.

It seems that Rajan's apparent exit from the Reserve Bank of India is nothing, but a false alarm. Rajan's three-year tenure as the RBI Governor ends on September 4, 2016.

The RBI Chief, on the other hand, has kept himself away from the debate and has neither accepted nor denied his reappointment. He has been praised to have maintained his composure in every situation, especially after Rajya Sabha MP Subramanian Swamy launched a tirade against him, citing him to be not "fully Indian" and accusing him of 'willfully' dashing the Indian economy with high interest rates.

On Tuesday, after the second bimonthly monetary policy review, Raghuram Rajan said in a self-prepared statement, that he would not like to spoil all the fun the press is having regarding the continuation of his tenure as the RBI chief. "I am sure you will know when there is news, I cannot do better than point you to statements of the Finance Minister and Prime Minister on this... That's all I have to say.", he said.

The government on his part has maintained a status quo regarding the issue, with Prime Minister Narendra Modi saying that it was not a "subject for media" to focus on. Under Modi's government, it is very likely that Rajan will surely bag a second term, keeping in mind his credibilty among foreign investors which is far more than what his critics have to say about him. "It may shock you (but) never has there been a serious disagreement between Mr Arun Jaitley and me," Rajan said in an interview to NDTV.  

For long, Rajan has been accused of having tight money policies that have ruined India Inc and have slowed economic growth. But Rajan took over as the RBI governor at a time when the Indian currency was depreciating and inflation was above 10 per cent. Analysts believe he definitely deserves a second term given the measures he employed to keep a check on rupee and inflation level.

If he exits, or as they say, if Rexit happens, so will millions of foreign investment from this country.