BJP's advice to the new RBI governor

The Bharatiya Janata Party (BJP) on Tuesday welcomed the appointment of noted economist Raghuram Rajan as RBI governor but advised him not to compromise on the autonomy of the institution or get cowed down by the government.

Asked for his reaction on Rajan's appointment, former Finance Minister and BJP leader Yashwant Sinha said, "I wish him all the best. He is a bright young man."

However, he maintained that Rajan's predecessor D Subbarao had also started as a favourite of the government till things went sour.

"Subbarao was the Finance Secretary before he went to RBI. He was appointed at RBI Governor by the UPA government just as Vinod Rai was appointed by this government as the CAG. But deep differences cropped up between the government and the RBI later," Sinha said.

He noted that this is the first instance where the government and the RBI differed in public on policy issues.

"Rajan should not compromise on autonomy of RBI and not get cowed down by the government," Sinha said, adding that the RBI chief needs to work with sagacity at a time when the central bank has a lot to do with the economy being in a bad shape.