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Subramanian Swamy writes to PM Modi, seeks termination of RBI's Governor

Earlier, Swamy had blamed Rajan for the rising inflation and increasing unemployment

Policy Pulse
Publish Date: May 17 2016 1:41PM | Updated Date: May 17 2016 1:41PM

Subramanian Swamy writes to PM Modi, seeks termination of RBI's Governor
BJP leader Subramanian Swamy on Tuesday wrote to Prime Minister Narendra Modi, seeking the ‘immediate termination’ of Reserve Bank of India (RBI) Governor Raghuram Rajan.
 
 
Last week, Swamy had blamed Rajan for the rising inflation and increasing unemployment, and had suggested that he should be sent back to Chicago. "In my opinion, Rajan is not apt for our country. He raised the interest rates on the pretext of checking inflation. But it has resulted in the collapse of industry and thus unemployment has increased. He should be sacked and sent back to Chicago, the earlier the better," Swamy had said.
 
 
Rajan was a professor of finance at the University of Chicago from 1991 to 2013, when he went on public service leave. In 2013, he took charge as RBI Governor; his term ends in September this year. Indicating his interest in a second term, Rajan said last week he has enjoyed every moment of the job, but there is "more to do".
 
 
Swamy's remarks came a day after Rajan said foreign banks have stopped opening branches in India as they have to put aside a lot more capital due to India's 'higher risk' credit rating. He had also questioned the monetary policy actions of central banks in developed countries in trying to boost demand and said that such moves could actually be having little impact along the lines intended.
 
 
Meanwhile, amid speculation about a possible second term for Rajan, Finance Minister Arun Jaitley on Monday declined to be drawn into the matter, but said there is a "mature relationship" between the central bank and the government.
 
 
"As far as the Finance Ministry and RBI are concerned, there is an institutional relationship between the two. It is a very mature relationship. We at the highest level at the two institutions have discussion and each other views is considered between us," he said.
 
 
To a question on whether Rajan is getting an extension, Jaitley quipped, "These are not issues which we discuss through the media."