Former Reserve Bank of India(RBI)governor Raghuram Rajan, in his book 'I Do What I Do: On Reforms Rhetoric and Resolve', has revealed that he was never in favour of demonetisation as the short- term economic costs would outweigh any longer term benefits from it, reported Hindustan Times.
Rajan explains economic concepts and talks of issues like tolerance and connection between political freedom and prosperity in his new book, which is a collection of essays and speeches during his stint as RBI head.
“At no point during my term was the RBI asked to make a decision on demonetisation,” Rajan has said in the book which is contrary to the speculations that the central bank was already prepared months before the announcement by Prime Minister Narendra Modi on November 8, the report adds.
However, according to a report by The Times of India, the RBI governor had given his opinion orally in February 2016. Subsequently, RBI submitted a note to the government mentioning about the necessary steps and time needed if the Centre went ahead with demonetisation.
Rajan's term as the RBI governor had ended last year on September 3.
When he took charge as governor of the RBI in September 2013, the rupee was in free fall, inflation was high, India had a large current account deficit, and exchange reserves were falling.
As measure after measure failed to stabilise markets, speculators sensed a full-blown crisis and labelled India one of the Fragile Five economies.
Rajan’s response was to go all out, not just to tackle the crisis of confidence, but also to send a strong message about the strength of India’s institutions and the country’s ongoing programme of reform, publisher HarperCollins India said.
Rajan’s commentary and speeches in “I Do What I Do: On Reform, Rhetoric & Resolve” convey what it was like to be at the helm of the central bank in those turbulent but exciting times, it said.
The book will hit stores on September 4.
(With PTI inputs)
