Raghuram Rajan Named India’s Bank Boss: Are South Indians Just Smarter Than Everyone Else?

Raghuram Rajan has been named the 23^rd governor of the Reserve Bank of India; that is, the central bank chief of the second-largest country on earth. Hopes are riding high in India that Rajan can impose fiscal measures to save the plunging rupee currency and bring inflation under control.

The 50-year-old University of Chicago economist also continues another tradition – the domination of South Indians in the prestigious post of central bank boss.

The first two RBI governors, Sir Osborne Arkell Smith and James Braid Taylor (who served from 1935 to 1943 when India was part of the British Empire) were Englishmen. Since then, of the 21 Indian bank governors, about half were of South Indian origin (as determined by their surnames and biographies), including five of the last six.

The governor of the RBI is appointed by a central board of directors (a committee itself appointed by the government of India), subject to formal approval by the prime minister.

Of course, these South Indian bank titans were not necessarily all raised and educated in the South – Rajan, a Tamil Hindu, himself studied in Delhi and in Europe – but this preponderance may suggest something about the educational standards of India’s southern regions.

According to the Population Census of India 2011, the literacy rate for the country as a whole was about 74 percent – but the rates in the southern states tended to be higher, Indeed, the province of Kerala boasts a literacy rate of almost 94 percent. (On the other end of the spectrum, Bihar, a poor, northeastern state, has a literacy rate of 63 percent.)

Overall poverty rates are also lower in the south and everyone is well aware that Bangalore possesses a world-famous technology hub.

But are there also cultural, racial or ethnic factors at play to explain why South Indians seem to excel academically and professionally, compared to North Indians?

An Indian columnist named Aakar Patel who moved to Bangalore from Mumbai wrote a blog about what he viewed as the superior intellect and higher tolerance of Southerners.

“[The] urban culture [in South India] is more intellectual,” he wrote. “My hypothesis is that this is so because its culture is dominated by the [upper-caste Hindu] Brahmin. I like keeping the company of Brahmins, I must admit. When I listen to intelligent conversation in Bangalore and look around the table, they dominate. People like U.R. Ananthamurthy [a novelist who writes in the Kannada language] would not be treasured in another culture as they are in Bangalore. It seems to me that civic life here is more intellectual, and certainly it strives to be more intellectual than in Gujarat or Maharashtra.”

Similarly, an Indian blogger named Navin Kumar wrote that, based on his observations and experiences, South Indian culture does indeed “place a lot of importance on education” and that South India scores higher on just about every single human development measure (male-female gap, educational achievement, poverty rates) when compared to North India.

Indeed, many of the most important people responsible for India’s economic miracle in recent decades -- including former Prime Minister Narasimha Rao, nuclear scientist Abdul Kalam, geneticist and founder of the “green revolution” M.S. Swaminathan, Infosys (NYSE: INFY) co-founder Narayana Murthy and technological entrepreneur Nandan Nilekani – all hail from the South.

Of course, any discussion of the intellectual and cultural “superiority” of South Indians versus North Indians treads on some controversial and dangerous grounds. One could extend the argument to the United States, where the last two chairmen of the Federal Reserve (Alan Greenspan and Ben Bernanke) are both Jewish – as are the front-runners for the next term, Lawrence Summers and Janet Yellen. (Like South Indians, Jews have also long been characterized as academically superior and intellectually gifted.)

Within India itself, the rivalry and hostility between North and South traces its roots to the ancient (and rather disputed) history of the subcontinent. A grossly oversimplified summary of Indian history posits that the Dravidians (the supposed original inhabitants of India) were driven southward more than 3,000 years ago by the invasion of the Aryans, who cut a violent swath of conquest all over the country and now dominate the north.

While many have doubted the credibility of the so-called “Aryan invasion” theory, what cannot be doubted is the very real lingering conflict between northern and southern Indians, with an abundance of stereotypes hurled at each other.

Rajeev Srinivasan (a southerner) wrote in Rediff.com a few years ago about the ascent of India’s south. “The fact is, the South is doing well precisely because it is the most Indian part of India,” he boldly declared. Srinivasan made the very inflammatory suggestion that the South “preserved” its Indian culture by not having to endure what he called the “two big external shocks” -- Muslim conquest and Christian imperialism -- to the same degree as the North. (Notwithstanding that the British took over all of India.)

To back up his claim, he cited that the North has suffered endless violence and sectarian warfare since at least the early Middle Ages (that is, between Hindus and Muslims), while relative peace and tranquility in the South allowed that region to flourish economically and intellectually.

He also cites that the Vijayanagar empire of the South helped protect ancient Hindu culture and guaranteed the region’s cultural “continuity.” (He also noted that the poorest and most backward parts of the South are found in areas dominated by Muslims.)

Naturally, Srinivasan’s comments would be lambasted by most northerners.

But, perhaps it was an odd comment by a foreigner, Microsoft (NASDAQ:MSFT) co-founder Bill Gates, that sums up the mixed blessings of South India’s apparent intellectual strengths. During one of his many trips to India, Gates once reportedly said that South Indians “are the "second smartest people in the world, after the Chinese.” While this may sound like a backhanded compliment, Gates meant it as high praise – and it has been embraced by many in the South since it came from Gates. But such pronouncement likely engenders resentment from other Indians, particularly those in the North.