BackSack Raghuram Rajan, says Subramanian Swamy in letter to Modi
Raghuram Rajan 'mentally not fully Indian', says Subramanian Swamy in letter to PM Modi
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New Delhi: In a fresh salvo at Reserve Bank of India (RBI) governor Raghuram Rajan, Bharatiya Janata Party MP Subramanian Swamy has written to Prime Minister Narendra Modi seeking the immediate sacking of the former International Monetary Fund chief economist while alleging he was “mentally not fully Indian" and has “wilfully" wrecked the economy.
Following up his barb against Rajan at the end of the Parliament session last week, Swamy on Monday wrote to the Prime Minister seeking the termination of Rajan’s services with immediate effect.
“The reason why I recommend this is that I am shocked by the wilful and apparently deliberate attempt by Dr Rajan to wreck the Indian economy," he wrote adding his concept of raising interest rates to contain inflation was “disastrous." Also, bad loans with public sector banks has doubled to ₹ 3.5 trillion in two years, he said. Rajan was appointed RBI governor by the previous United Progressive Alliance government in September 2013 for a three-year term, which can be extended.
“These actions of Dr Rajan lead me to believe that he is acting more as a disrupter of the Indian economy than the person who wants the Indian economy to improve.
“Moreover he is in this country on a Green Card provided by the US government and therefore mentally not fully Indian. Otherwise why would he renew his Green Card as RBI Governor by making the mandatory annual visit to the US to keep the Green Card current?" he wrote.
Swamy had last week stated that Rajan was “not appropriate for the country" as he had in the garb of controlling inflation raised interest rates leading to the “collapse of industry and rise of unemployment in the economy."
“The sooner he is sent back to Chicago, the better it would be," he had told reporters in Parliament House.
Rajan is on leave from his post as professor of finance at the University of Chicago’s Booth School of Business. Rajan’s three-year term ends in early September and if an extension is denied, he will be the first RBI governor since 1992 to not have a five-year term. His predecessors—D. Subbarao (2008-2013), Y.V. Reddy (2003-2008), Bimal Jalan (1997-2003) and C. Rangarajan (1992-1997) had five-year terms.
After assuming charge as RBI governor in September 2013, Rajan gradually raised the short-term lending rate from 7.25% to 8% and had retained the high rates throughout 2014. He kept the rates high, citing inflationary concerns despite intense pressure from the finance ministry and the industry for softening them with a view to boosting growth.
The governor began the process of lowering the rates in January 2015 and since then they have come down by 1.50 percentage points to 6.50%.
Swamy said in the letter the BJP came to power under Modi’s inspiring leadership. “I cannot see why someone appointed by the UPA government who is apparently working against Indian economic interests should be kept in this post when we have so many nationalist minded experts available in this country for the RBI Governorship."
He urged Modi “to terminate the appointment of Dr Raghuram Rajan in the national interest."
Swamy, who was earlier this month nominated to Rajya Sabha by the BJP government, said Rajan’s concept of containing inflation by raising interest rates was “disastrous."
“When the Wholesale Price Index (WPI) started to decline due to induced recession in the small and medium industry, he shifted the target from WPI to the Consumer Price Index (CPI) which has not however declined because of retail prices. On the contrary it has risen.
“Had Dr Raghuram Rajan stuck to WPI interest rates would have been much lower today and given huge relief to small and medium industries. Instead they are squeezed further and consequent increasing unemployment," he wrote.
Rajan, Swamy said, was “acting more as a disrupter of the Indian economy than the person who wants the Indian economy to improve."
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