When he settles down in his office on the 19th floor of the Reserve Bank of India for the first time next Wednesday, Raghuram Rajan will be greeted by calming views over Mumbai’s harbour and the monsoon-soaked hills beyond. But as he contemplates his new role as the central bank’s governor, the predicament facing his nation could hardly be less tranquil.

Mr Rajan is one of India’s most celebrated sons: a brilliant University of Chicago economist who won special renown as one of the few in his profession to foresee the global financial crisis. Yet early last year he received an unexpected phone call asking him to leave America and return home, first as an adviser to Prime Minister Manmohan Singh; and, early this August, as his country’s most senior financial regulator.

The appointment attracted global attention on account of Mr Rajan’s intellectual stature, but more particularly because it thrust him into the heart of India’s growing economic struggles. Its once-stellar growth rate has slumped, while fears of reduced US Federal Reserve quantitative easing have sent the rupee plunging, raising worries that Asia’s third-largest economy could be on the cusp of a genuine financial calamity.