Bharatiya Janata Party leader Subramanian Swamy on Thursday said that Reserve Bank of India Governor Raghuram Rajan “should be removed” from his post.
Advertisement
Swamy’s observation about Rajan came at a time when debate over Rajan’s 2nd term is gaining momentum.
Addressing a largely student and academic audience, Rajan however started with a disclaimer saying “none of what I say today is a policy statement”.
Rajan was a professor of finance at the University of Chicago from 1991 to 2013, when he went on public service leave.
Dr Rajan “should be relieved of his responsibilities as soon as possible and sent back to Chicago”, said the BJP lawmaker, known for his controversial comments. He is now on leave from the university.
“You can’t bulldoze your way in some of these situations and therefore you have to be a little more clever”. For example we have a bankruptcy bill that was legislated last week and we also have a monetary policy committee that lays the framework that was also legislated last week. Just like in industrial countries, there is a lot of stuff, which does not require deep insights of economics.
“A lot of policy formulation is Economics 101”.
Advertisement
“I think we are a recovering economy and when you talk about structural reforms, we have seen a playout in the past few days”. However, on a serious note, he added that, “The joy of trying to formulate policy in a developing country is that there are many more places where good policy can have significant effects”. But one of the concerns bankers have been expressing, even if bankers may have low credibility because they have cried wolf too often, that eventually it will… create greater aversion to taking on risky lending.
