Former Reserve Bank of India (RBI) Governor Raghuram Rajan spoke about the salary he used to draw when he was at the top job. He said that more than the salary it was the official residence allotted to the RBI Governor that was a bigger perk.
Speaking with YouTuber Raj Shamani at the ‘Figuring Out’ podcast, Raghuram Rajan said that his salary as RBI Governor was Rs 4 lakh a year. “I don’t know what the current salary is but in my time it used to be Rs 4 lakh a year. The biggest perk is the house. You get a really big house, a few blocks away from Dhirubhai Ambani’s house in Mumbai on Malabar Hill,” he said.
“I did a calculation at one point. If we sold the house…we lease it, we have a long-term lease from the Port Authority…we’d get about Rs 450 crore. If we invest that, we could pay the entire top brass of the RBI their salary. We could just move into an apartment. But it is a splendid house,” said Rajan.
When asked if Rs 4 lakh per annum is an appropriate amount to be the salary of the RBI Governor, Rajan said it is at par with other government officials. “I think it is on par with the Cabinet Secretary. It’s what government officials get. You don’t get other perks that government officials get, you don’t get a pension. But you get I think medical facilities. I don’t get a pension,” he said in the podcast.
The former RBI Governor explained the rationale behind the salary structure. “The reason why most RBI governors don’t get pension is because they were civil servants. So they already got a pension from their civil service. But there was one who wasn’t a civil servant…I won’t name him…but I thought it was appropriate for the RBI in that case because of his many years of service to the RBI and to the government that he should get a pension,” said Rajan.
The economist also said that in his personal case, he does not need a pension. After stepping down as the RBI Governor, Rajan went back to his job. Raghuram Rajan is the Katherine Dusak Miller Distinguished Service Professor of Finance at Chicago Booth.
“But I don’t need a pension…I have a fulltime job. I was young enough to go back to a job…so it has not been my issue. But again the rationale was that you have another job before you come into the RBI or you have been an RBI official, actually only two RBI officials have been appointed RBI governor, so you have an independent pension from somewhere,” said Rajan about the RBI Governor’s salary structure.
Speaking about perks of the job, Raghuram Rajan said, “You get a car, you get a lot of stuff to maintain that house…it is an old house, so you need maintenance.”
When asked if it is a luxury car that is given for the official use of the RBI Governor, Raghuram Rajan pointed out that it would be inappropriate in a country like India to use a luxury car for official purposes.
Raghuram Rajan has released his latest book ‘Breaking the Mould : Reimagining India’s Economic Future’, co-authored with Rohit Lamba.
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