Question

What significant contribution did K. N. Raj make during his time at the Reserve Bank of India (RBI)?

• A. He established the first regional office.
• B. He computed India's Balance of Payment estimate for the first time.
• C. He introduced a new currency system.
• D. He drafted the monetary policy framework.

Answer 1

Answer:

B. He computed India's Balance of Payment estimate for the first time.

K. N. Raj: A Luminary in Indian Economics

• K. N. Raj (Kakkadan Nandanath Raj) was a highly influential Indian economist who played a crucial role in shaping India's economic policies and academic discourse, particularly during the post-independence era.
• His career spanned significant institutions, including the Reserve Bank of India (RBI), the Delhi School of Economics, and the Centre for Development Studies (CDS) in Thiruvananthapuram.

Groundbreaking Contribution at RBI

• During his tenure at the Reserve Bank of India (RBI), K. N. Raj made a pivotal contribution by computing India's Balance of Payments (BoP) estimate for the first time.

• Significance of Balance of Payments (BoP):

  • The BoP is a comprehensive record of all economic transactions between a country's residents and the rest of the world over a specified period, typically a year.
  • It encompasses trade in goods and services, income flows, transfers, and capital transactions.
  • Accurate BoP data is indispensable for governments to formulate effective monetary and fiscal policies and understand their external economic health.
• Before Raj's meticulous work, a systematic and reliable estimation of India's international economic transactions was not available, making his contribution foundational for economic analysis and policymaking.

Broader Impact and Key Facts for Competitive Exams

• Role in Five-Year Plans: K. N. Raj was a key architect of India's initial Five-Year Plans. He was notably involved in drafting the financial framework of the first Five-Year Plan (1951-1956).
• Planning Commission: He served as an economic advisor to the Planning Commission, significantly influencing India's strategy for planned economic development.
• Kerala Model of Development: While a collective effort, K. N. Raj's intellectual insights and his instrumental role in establishing the Centre for Development Studies (CDS) in Thiruvananthapuram provided a robust academic and research foundation for the distinctive