Modi Backs Rajan After India Central Banker Decides to Exit

  • Rajan plans to leave when term ends in early September
  • Modi said he doesn’t endorse personal attacks on bureaucrats

Indian Prime Minister Narendra Modi said he appreciated the work done by Raghuram Rajan and personal attacks by a party member against the central bank chief were unfair, a defense that came more than a week after Rajan said he won’t seek a second term.

“My experience with him has been pleasant and I appreciate the work done by him,” Modi said in his first comments on Rajan’s departure during an interview to Times Now TV telecast on Monday. “Those people who criticize him, they are not doing justice to Raghuram Rajan.”

Subramanian Swamy, a lawmaker from Modi’s ruling party, had led a public campaign against Rajan, criticizing him for keeping borrowing costs too high and saying that his time abroad had made him “mentally not fully Indian." When asked in May, Modi had declined to say whether he was in favor of an extension for Rajan.

Rajan would work for the betterment of the country irrespective of which role he’s in, Modi said on Monday. In speaking engagements over the past week, Rajan defended his actions and exhorted a continuation of his battle against inflation and a bank clean up. He also said he will "always be available to serve my country when needed."

‘They Are Wrong’

Following the news of Rajan’s planned departure, Swamy -- who holds a doctorate in economics from Harvard University -- has attacked candidates said to be shortlisted by the finance ministry to succeed Rajan. These include Chief Economic Adviser Arvind Subramanian and Economic Affairs Secretary Shaktikanta Das.

Modi on Monday said he did not endorse attacks on bureaucrats and sought an end to comments made for "publicity." People should be more responsible about their public comments on officials working for the government, he said, without naming anyone.

“Those who think they are bigger than the system, they are wrong,” Modi said. “This is my clear message. There is no ambiguity to it.”

Also on the list of possible successors to Rajan are a trio of former or serving deputy central bank governors: Rakesh Mohan, Subir Gokarn and Urjit Patel. The finance ministry official who revealed the information asked not to be identified, citing rules for speaking with the media.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE