Raghu ram Rajan governor of reserve bank has been presented his last monetary policy. Now as a governor his term left only almost three weeks. Rajan taken monetary decision only on set parameters despites political pressure and claims. As a governor rajan’s performance if calculated then in his term attention is needed in economic p parameters. His work height is not seen on this basis that some political people what said about him.
When Raghu ram Rajan hold the post of RBI governor in September 2013 then retail price inflation were on 10.70 percent of country. Rajan has been successful to decrease half the dearness in this three year term. Retail inflation has been 5.77 percent in June 2016. Although big reason of decrease in dearness has decrease in price of crude in international market.
Rajan initial increase by half percent in interest rate in his term to stop dearness. After that Rajan has cut interest rate by 1.5 percent in his term. When Rajan hold the RBI governor post then repo rate was 7.5 percent. It went up to 8 percent in January 2014. Repo rate fallen by 1.5 percent after January 2015 and now it is on 6.5 percent. Repo rate is on lower level of almost four and a half year.
When Rajan handled the post of governor then rupee was in so pressure. India was suffering from worst currency crisis. It had been fall by 10.4 percent. After Rajan handled the office rupee become strong by 1.12 percent. Due to up- down rupee was lower level of eight years last week. Rupee was 67.63 in September 2013. Its level is Rs. 66.83 per dollar in August 2016.
Banks has cut the interest rate in the Rajan’s term. Banks’ lending rate were 10.3 percent in September 2013. It became 9.3 percent by falling by 0.90 percent in August 2016. Lending rate in second half in Rajan’s term is being an anxiety because banks did not piped the profit of cut in repo rate by the reserve bank to the consumer.
Rajan’s three year term country’s forex reserve reached at reserve high. Country’s forex reserve was $275 billion on September 2013. Now it is on record level by $365 billion.
Rajan’s tenure could not be seen only on big achievement. Non-Performing Asset (NPA) of banks has increased three multiple in Rajan’s term. Country’s commercial banks have 2.52 lakh crore NPA in December 2013, which reached 5.94 lakh crore in March 2016. Rajan also accepted the responsibility that he has not handling the NPA.
If we talk about country’s Current Account Deficit (CAD) then it fall by record in Rajan’s three year term. Although CAD is domain of finance ministry. CAD record of GDP September 2013 fall from 4.10 percent level in June 2016 it remains 0.1 percent of GDP. Country’s CAD was $18.08 billion in March 2013. It being reduced $32 million in March 2016.
Investors got more than 50 percent from stock market in Raghu ram Rajan’s term. 4 September 2013 when Rajan handle the post of RBI governor, then SENSEX of BSE was on the level of 18,567. It being 28,130 mark level on 9 August 2016. Means, SENSEX leaping by 9563 number in Rajan’s term. Investors found 51.50 percent return. Where NIFTY of NSE given return of 53 percent. Level of NIFTY was 5680 on 4 September 2013, which being on the level of 8,711 on 8 August 2016.
Trust of FII has been increased on Indian economy in Raghu ram Rajan’s term. According to market regulator SEBI, FII invested Rs.1.92 lakh crore in investment Indian equity market between September 2013 and July 2016. FII selling only 9 months from 35 months during this period.
Raghu ram Rajan handled the post of RBI governor on 4 September 2013 in the term of UPA-2. In his three years term many infrastructure reformed in banking sector.
- RBI started first time to analyse dearness from Retail Inflation (CPI). On which basis review began of monetary policy. From this step first time RBI success to understand dearness burden of public. Before it RBI has taken decision on the basis of whole dearness.
- RBI braked on the strategy of do not given immediately profit of rate cut to the public by the banks. RBI regulate lending rate formula on the basis of MCLR from April 2016.
- First time signing on MOU between RBI and Finance Ministry to reduce the dearness for monetary policy in framework.
- RBI taken many important decision to control the increasing NPA, along with banks also got rights. From which has been correction in default. control