“Had Dr Raghuram Rajan stuck to WPI interest rates would have been much lower today and given huge relief to small and medium industries”.
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Swamy said Rajan’s “disastrous” concept of raising interest rates continues to hurt the economy and his decisions have increased unemployment in the country. ” (Rajan) is acting more as a disrupter of the Indian economy than the person who wants the Indian economy to improve”, Swamy wrote in his letter.
“In my opinion, RBI Governor is not appropriate for the country”.
When asked about the “heat from the BJP and the government” on whether he should be given another term and about the politics happening on this matter, Rajan said: “There is a lot of fulfillment from making things actually happen for improving the environment…” It is a very matured relationship.
Dr. Rajan, 53, a well-known economist, was appointed on August 22, 2013 as the Governor of RBI for a three-year term.
The letter follows Swamy’s outburst last week when he said that Rajan be sent back to Chicago.
The detractors’ argument is that Prime Minister Narendra Modi’s promise of 8 per cent-plus growth has not yet become a reality due to Dr. Rajan’s approach to interest to rate cuts.
We at the highest level, at the two institutions, have discussions and each consider each other’s views and observations, FM added. In 2013, he took charge as RBI Governor; his term ends in September this year. But the governor has emphasized that there is a “respectful relationship” between the central bank and the government. His real target seems to be the Finance Minister. The letter also included that RBI Governor’s focus moved from WPI to consumer price index (CPI), which has not however declined because of retail prices. Instead they are squeezed further and consequent increasing unemployment.
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Describing his job of formulating monetary policy in India as a “joyful” and easy task, Rajan had said complexities arise when ensuring its political acceptance and one needs to be “a little more clever” for that.
