The government appreciates the work done by Reserve Bank of India (RBI) Governor Raghuram Rajan and respects his decision to return to work in academics at the end of his term in September, Commerce Minister Nirmala Sitharaman said on Monday."We appreciate the work Reserve Bank governor has done. He has taken a call that at the end of his term he is going back to academia. We respect that. That is where the matter is," Sitharaman told members of Indian Women's Press Corps here.Asked what could have prompted Rajan's letter to his colleagues announcing this decision at a time when he had become the focus of controversy regarding renewal of his tenure, she said: "I am not adding to speculation at all.
"We have respected his contribution. Government's position is absolutely clear and the finance minister has made his position clear on this."On a possible successor to Rajan, the minister said it was still too early to speak on the subject and a proper process would be followed.India Inc on Sunday recalled the "outstanding contribution" of Rajan following his decision not to seek the second term, and hoped an able replacement for him will be found.Rajan became RBI Governor in 2013 at a time when the US Federal Reserve had declared its intent to wind down its stimulus programme and the rupee had plunged in value in respect of the US dollar on fears of a spiralling current account deficit.In a series of measures, Rajan managed to stabilize the currency and also brought back investors.It will be the first time in 24 years that the RBI governor has departed after a single three-year term.In this context, it is being felt that the government's failure to retain Rajan will be seen by the world as India's non-approval of his policy against inflation and the huge stressed assets of the banking sector.