Jaitley backs RBI Governor but no word on his tenure

RSTV Bureau
FILE: FIle photo of Union Minister for Finance Arun Jaitley with Governor of Reserve Bank of India, Raghuram Rajan at a meeting in New Delhi. Photo - PTI

FILE: FIle photo of Union Minister for Finance Arun Jaitley with Governor of Reserve Bank of India, Raghuram Rajan at a meeting in New Delhi.
Photo – PTI

Union Finance Minister Arun Jaitley has once again thrown his weight behind Reserve Bank of India (RBI) Governor Raghuram Rajan, who is under attack from his party colleague Subramanian Swamy. Denouncing attack on the RBI Governor, Jaitley said the debate should be about the issues and policies, and not about the personalities.

On a six-day visit to Japan, Arun Jaitley, however, declined to comment on whether Raghuram Rajan’s term would be extended after his current three-year tenure ends this September.

“I do not approve of any of these comments being made by anyone as far as the personality is concerned, because the RBI and its Governor is an important institution in Indian economy,” Jaitley said in Tokyo.

On a question if the Central government will consider a second term to Rajan, he said, “These are not the subjects I discuss with media.”

Earlier, in an interview the Wall Street Journal, even Prime Minister Modi has said that the issue of reappointment of RBI Governor Raghuram Rajan was an administrative subject and it should not be an issue of interest of the media.

“I don’t think this administrative subject should be an issue of interest to the media,” PM Modi had told the Wall Street Journal.

File Photo: RBI Governor Raghuram Rajan is also working towards reduction of  Bank NPAs.

File Photo: RBI Governor Raghuram Rajan. Photo – PTI

Raghuram Rajan, who was appointed by the previous Congress-led UPA government, has been facing a continuous attack by BJP MP Subramanian Swamy. The latter had even written twice to the Prime Minister seeking termination of his service even before his term comes to an end in the first week of September.

Criticising the RBI governor, who enjoys an extremely tall reputation globally, Subramanian Swamy alleged that RBI Governor has failed to lower interest rates and boost the economy.

“I have made comments on the basis of his (Rajan’s) wrong policies. He has finished the small and medium industries to help American multi-national corporations to come here and take over,” Swamy had said last week in an event held in New Delhi.

A former chief economist of the International Monetary Fund (IMF), Rajan is currently on leave from the Chicago Booth School of Business.

His predecessors — D Subbarao (2008-2013), YV Reddy (2003-2008), Bimal Jalan (1997-2003) and C Rangarajan (1992-1997) — had five-year terms.

Rajan, who after taking over raised the short-term lending rate from 7.25 per cent to 8 per cent and retained the high rates throughout 2014, began the process of lowering the rates in January 2015. He has since then cut them 1.50 per cent to 6.50 per cent.

(With inputs from the Agencies)