A good start by India's new broom In his inauguration speech as the new head of the Reserve Bank of India, Raghuram Rajan said the governorship "is not meant to win ... Facebook likes. Still, investors raised their thumbs to the measures the new governor announced as he sought to restore confidence in India's embattled currency. After months of free fall, the rupee rose steeply against the dollar. Shares in the Mumbai Sensex index also rallied sharply. Investors" euphoria is, in part, a vote of confidence in Mr Rajan. In his speech on Thursday the new governor did not make substantial statements on monetary policy, holding fire until after the US Federal Reserve's Open Market Committee's mid-September meeting. This makes sense, as any Fed announcement on a possible monetary tightening could have a momentous impact on the rupee. Mr Rajan, however, is not sitting on his hands. He wants to lure in capital inflows by letting banks borrow more from abroad. He is also encouraging lenders that receive dollar deposits from Indians abroad to swap them into rupees, by offering a subsidised currency hedge. But while these measures should help fund India's growing current account deficit, they are not riskless. The banks or the RBI would be exposed to potentially heavy losses were the rupee to depreciate further. The new governor's agenda to bring financial services to India's poor is less controversial and crucial for long-run growth. Almost 70 per cent of Indians do not hold a bank account and have to rely on often usurious informal moneylenders. Mr Rajan's big test will come in January, when the RBI awards new banking licences. The new governor has promised these permits will be awarded in a transparent and diligent manner. He should stick to his word. Ultimately, Mr Rajan will be judged for what he does to steer India away from one of its worst crises since the financial mayhem in 1991. The governor must show he is his own man, tightening liquidity if needed even if this hampers growth. His comments on Thursday that the main role of a central bank is monetary stability should be the intellectual cornerstone of his term in office. There is only so much, however, that a steady monetary hand can deliver. India needs steep cuts in the public subsidy bill aimed at reducing its budget deficit, and more infrastructure and less red tape to attract investment from abroad. Without help from politicians in Delhi, any good work done by Mr Rajan risks being in vain.