The world economy is facing a serious challenge and India is not an exception, said the newly-appointed Chief Economic Adviser to the Finance Ministry Raghuram Rajan. He said he hoped to find some solution to help the Indian economy in his new role.
Rajan, who succeeded Kaushik Basu, whose term ended on July 31, took charge on Wednesday.
Terming the rainy day in Delhi as “auspicious”, Rajan began his stint with an hour-long meeting with Finance Minister P. Chidambaram followed by another one with Deputy Chairman of Planning Commission Montek Singh Ahluwalia.
He is also expected to meet the Prime Minister, who is in Tehran for the NAM summit.
Rajan takes over at a time when first quarter economic growth has slowed to a three-year low of 5.3 per cent. Inflation, stoked by high food prices, has averaged more than seven per cent in 2012 and the rupee has fallen by about 17 per cent against the dollar.
To top it, Standard & Poor’s and Fitch Ratings have cited risks such as the twin deficits and have warned that they may strip Asia’s third-largest economy of its investment-grade credit rating.
On November 3, 2008, the Government had appointed Rajan as ‘Honorary Economic Adviser to the Prime Minister’ in the rank and status of Secretary to the Government of India. He also chaired the High Level Committee on Financial Sector Reforms in 2007.
Rajan has the distinction of being the youngest person to hold the post of Economic Counsellor and Director of Research at the International Monetary Fund, from October 2003 to December 2006. He is also considered to be one of the first to see the 2008 global financial crisis coming.
As Eric J. Gleacher Distinguished Service Professor of Finance, Graduate School of Business, University of Chicago, Rajan has researched broadly on the role of institutions, especially financial institutions, in fostering economic development.
In 2003, he was awarded the inaugural Fischer Black Prize by the American Finance Association for contribution to finance by an economist under 40.