Subramaniam Swami, BJP's Rajya
Sabha member, has a track record of criticizing Raghuram Rajan, whose
decision on to step down as RBI Governor when his term ends in September
rattled government officials and foreign investors. Swami appeared to have bitten off
more than he could chew when he took on Rajan, but in the end his stance
appears not too different from the government. After writing to the PM, calling
for the sacking of Rajan because he was "mentally not fully Indian"
and had "willfully" wrecked the economy. Swami said Rajan deliberately kept interest
rates high which led "to recession in the domestic small and medium
industries and thereby causing not only a sharp decline in output but also a
massive unemployment of semi-skilled labor". Swami, who coined a term for Rajan as R3, said the Indian economy would be hit by $26 bn FCNR (B) redemption. "R3 planted a time bomb in our financial system in 2013. It is timed for December 2016."
In fact, last week, Swami had claimed, "If India wants to see economic growth at 10%, Rajan should go back to Chicago."
The
problem with Raghuram Rajan
is that he came to believe his intellectual and global credentials were so
impressive that he would survive the regime change without ‘getting used to
it’. Indeed, and on the contrary, it was for Mr. Narendra Modi, the Sangh
Parivar and the Ministry of Finance to get used to him.
Rajan has very impressive academic credentials
and international experience and he is very articulate.
However,
it seems from the outside that he was not willing to come to terms with India’s
political economy. To imagine that the central bank is independent of a
nation’s political economy is at best, naïve and at worst, arrogant. Rajan has
not given a full explanation for his decision to step down, but defended his
actions at the RBI.
While
Raghuram Rajan has plenty of critics at home, Rajan is a favorite among foreign
investors and has been credited for bringing inflation under control.
- Bhavya Bhatia
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