India’s Jaitley Denounces Attacks on Rajan as Future Uncertain

  • BJP’s Swamy seeks Rajan’s removal in fresh letter to Modi
  • Finance minister says public debates should focus on issues

Finance Minister Arun Jaitley denounced attacks on Reserve Bank of India Governor Raghuram Rajan as his ruling party colleague reiterated calls to sack the central bank chief for keeping interest rates high.

“I don’t approve of personal comments against anyone, let alone with the RBI governor," Jaitley told NDTV television channel in an interview broadcast on Thursday. “The RBI is an important institution. It makes its judgement. One can agree or disagree with their judgement, but that’s a debate on issues. I don’t think we should allow a public discourse where instead of a debate on issues, we concentrate a debate on persons."

Subramanian Swamy, a member of the ruling Bharatiya Janata Party and a rival to Jaitley, wrote another letter to Prime Minister Narendra Modi on Thursday calling for Rajan to be either fired or dismissed when his term comes up for renewal in September. His second letter in as many weeks accused Rajan of keeping interest rates unnecessarily high, violating rules by criticizing the government in speeches and using his Chicago University e-mail address to send “sensitive financial information.”

Rajan met with Modi in New Delhi on Wednesday, according to three people familiar with the situation who asked not to be identified because the meeting was private. They provided no details of the meeting and said the two have met regularly in the past. RBI spokeswoman Alpana Killawala didn’t respond to an e-mail seeking comments on Swamy’s latest letter to the prime minister.

One-Eyed King

Rajan is a former chief economist of the International Monetary Fund and is currently on leave from the Chicago Booth School of Business. Unlike previous central bank governors, he has wandered into policy matters not usually associated with central banking. In October 2015, his outspoken call for tolerance amid a debate over religious discrimination agitated members of Modi’s party.

More recently, Rajan caused a stir by characterizing India’s rise as the world’s fastest-growing major economy as a one-eyed king in the land of blind. The proverb was used as he underlined the need for policies to sustain India’s growth momentum.

Rajan was countered by Junior Finance Minister Jayant Sinha and Commerce Minister Nirmala Sitharaman, who said he should have chosen his words more carefully.

Improve Public Dialogue

Rajan later said he wasn’t denigrating India’s success with the comment, and called for an improved public dialogue in which remarks are kept in context. He added that while the country’s growth rate reflects the government’s hard work, policy makers “have to repeat this performance for the next 20 years before we can give every Indian a decent livelihood."

Asked if Rajan had exceeded his brief during his public meetings, Jaitley told NDTV that some public figures are outgoing and speak their mind while others keep a low profile. 

"I can’t preach to the world ‘Don’t go and deliver lectures’ because I do it a lot myself," Jaitley said. "I go out and speak on subjects which don’t concern my ministry."

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