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Modi government doesn’t deserve Raghuram Rajan: P Chidambaram

By IANS Updated: May 29, 2016 12:35 am

New Delhi, May 28 : Taking a dig at the Centre, former finance minister P. Chidambaram on Saturday wondered whether the Narendra Modi-led BJP government “deserves” RBI Governor Raghuram Rajan and described him as “one of the most outstanding economists” in the world.

“I am beginning to think whether this government deserves Dr Rajan?” Chidambaram replied when asked whether the RBI governor should be given a second term.

The Reserve Bank of India (RBI) governor’s three-year term ends in the first week of September. BJP leader Subramanian Swamy has been consistently urging that Rajan should not be given an extension.

“UPA government appointed one of the most outstanding economists of the world as the governor of RBI. We placed full confidence in him at that time, we continue to place full confidence in him today,” Chidambaram added.
The former finance minister chose not to comment on Swamy’s letter to the prime minister asking him to sack Rajan.

“If the finance minister or PM make similar comments I will comment. In the absence of the FM and the finance minister making a similar comment, there is no need for Congress party to respond,” Chidambaram told mediapersons.

To a question on Finance Minister Arun Jaitley having differences with Rajan on the issue of interest rates, Chidambaram said: “World over finance ministers and central bank governors engage in a dialogue. That doesn’t mean finance minister is questioning the competence of the RBI governor. Each one approaches the economy in his or her perspective. Government’s perspective is growth and central bank governor’s perspective is monetary stability.”

“Two out of 10 times the finance minister may have some reservations with regard to some decisions. This is true of all finance ministers and central bank governors all over the world,” he added.

He further said: “As far as we are concerned, we had the best of relationship with all central bank governors and as long as we were in government, we had the best relationship with Dr Raghuram Rajan.”

He also took a dig at Union Commerce and Industry Minister Nirmala Sitharaman when asked about her criticism of Rajan.

“If I can put the question by a straw vote by this audience, between Dr. Rahguram Rajan on one hand and the commerce minister on the other, you know how the vote will take place?” said Chidambaram.

Indicating that the RBI and the government were not on the same page on various issues, Chidambaram said: “CPI (consumer price index) inflation has risen from 3.7 percent in July 2015 to 5.4 percent in April 2016.

“It is not clear whether the government and the RBI are agreed on the strategy for inflation management. In absence of an agreed strategy, inflation is bound to increase,” he said.

By IANS Updated: May 29, 2016 12:35:53 am