If the roots of the economy are rotten, how will you make it grow?

After weeks of insults the Governor of the Reserve Bank, Raghuram Rajan announced on 18 June that he will not be seeking a second term when this one ends on 4 September, 2016. If Rajan is not really an Indian at heart and is seeking to wreck the economy, as Subramaniam Swamy alleges, he would have announced his decision of Monday morning and watched in glee as the stock market tanked and the rupee plummeted in value. Instead he announced his decision on Saturday, when markets were closed, giving the government plenty of time to use depositors money as it forced the SBI to act on foreign exchange, to keep the rupee steady, and to use life insurance money as it forced the LIC to buy shares being offloaded by foreign investors. In panic the government hastily announced new rules for Foreign Direct Investment which will apprently bring in a flood of dollars and create millions of jobs. We remember the FDI in multi-brand retail by the Congress, that was supposed to be a 'game changer'. We are to allow 100% foreign control of airlines, which means bye-bye Air India, and 74% control in existing pharmaceutical firms, which will enable the giants from the US and Europe to buy up our companies and put up prices. Wonderful. The other charge against Rajan is that he is a Congress agent, because he was appointed by the Congress and has kept interest rate unnecessarily high, thereby preventing new investment. The fear was that he was a Congress Trojan horse, who will choke off economic growth, so that the BJP loses the general election in 2019 and the Congress can form a coalition government with Rajan as the default Prime Minister, much as Manmohan Singh was from 2004-2014, while the real power will rest with Sonia Gandhi. In which case perhaps Mr Modi will remember the old advice," Keep your friends close and your enemies closer." As long Rajan was the Governor of the RBI he was forced to follow some decorum but as a professor in the US he can say or write anything he wants. And the Americans will listen. Who really benefits from Rajan's departure? Banks, which are hiding Rs 13 trillion of bad loans, and steel, real estate and infrastructure companies which have huge loans that they do not wish to repay. Israel had a problem with huge companies, owned by certain families, which controlled a vast range of businesses and had power to influence policy. As Governor of Bank of Israel, Stanley Fischer took on one such powerful business group, and won. Because the Prime Minister, Netanyahu supported him. Rajan lost to the crooks. Mr Modi is fond of reciting Sanskrit verses. We are not as learned as him but would like to remind him of one line which says," Swadeshe pujyate raja, vidvan sarvatra pujyate." Which means, a king is respected only in his own country, while a scholar is respected everywhere. Beware of chamchas.