Baptism of Fire, is a Christian phrase and originates from the words of John the Baptist in Matthew 3:11. It is taken as a reference to the fiery trial of faith which endures suffering and purifies the faithful. In common language, it is widely used as a phrase which means a harsh situation a company or an individual passes for the first time. Once this difficult phase is over, the company or individual can come out clean from it with success or might have succumbed to the relentless situation. This type of experiences can either make the company (or individual) stronger or weaker depending on the way they handle the situation.
When Raghuram Rajan took over Duvvuri Subbarao as Reserve Bank of India Governor, Indian economy was in a dismal condition. He was expected to improve the depreciating rupee and the falling Indian economy immediately under immense pressure. Rajan was facing a very relentless situation in his beginning days as the RBI governor. He was deemed responsible to pull India out of one of the worst predicaments since 1991, with its balance of payment crisis and the ever low devaluation of rupee. Thus we can say here that Rajan faced ‘Baptism of fire’ when he first joined as the RBI Governor of India in September 2013. The financial market experts had faith in Raghuram Rajan’s credibility and he was able to prove them right by creating monetary and fiscal policies affecting the Indian economy positively. And he succeeded in controlling the depreciation of the rupee and hence making the Indian economy stable.