The Great Indian Talent Drain - Raghuram Rajan’s exit that tells a lot
We want the best to work for us, but an environment of autonomy or creativity is seldom given to the best of brains to flourish.
This indeed is the story of Raghuram Rajan, RBI’s governor, who has decided to step down when his three years of tenure ends in September and return to academia in the US. Although this decision has been perceived as a big loss for India in terms of talent, it has simultaneously brought to the fore, the difficulty of adapting to the culture the connotations of which go beyond just the political and organizational set up, to talent management, building a culture that allows autonomy and creativity and India’s inability to manage institutional organization.
Regardless of political ideology, analysts converged in worrying about the ability of the government to attract and retain talent and how talent deficit at political level and at civil servants’ level can be the biggest roadblock for Modi’s execution of his ambitious vision.
The impact that this loss will have on the Indian economy will be significant: On the one hand, post liberalization every single RBI governor has had at least five years in office. Globally, central bank governors stay on for over six years as a sign of policy stability. Rajan’s decision of departure after just three years has already sent negative signals about the management of the Indian economy. On the other hand, in his short period as RBI governor, global investors and international agencies saw him as a leader who invested in stabilizing the economy, curbing inflation and forcing banks to declare losses. His stepping down will bring uncertainty and worry to global investors.
It is also a potential loss of future talent that may consider coming back to India. This instance of culture clash that many expats reflect upon when they return after living and working abroad is very conspicuous as there is an inability to fit to the culture. Differences in understanding, lack of autonomy, power and independence can be frustrating and sometime unmanageable. That is probably what has happened so many times when expatriating talent and looks like is the same case here as well.
India has a huge pool of talent abroad that is willing to serve the country. Rajan continues to hold an Indian passport and has expressed his desire to continue to contribute to India’s growth, but his return to the US is not only an opportunity loss for RBI but also a signal that the culture and ecosystem is not inclusive enough to attract and retain key talent willing to return to contribute.