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We should kick out the RBI governor: Subramanian Swamy

Source: PTI
Last updated on: May 12, 2016 18:05 IST
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'People who come from IMF-World Bank backgrounds have no dynamism at all,' Subramanian Swamy said.

BJP leader Subramanian Swamy on Thursday suggested that Reserve Bank Governor Raghuram Rajan be removed from the post as he was responsible for "unemployment and collapse" of industrial activity. 

"In my opinion, RBI Governor is not appropriate for the country. I don't want to speak much about him. He has hiked interest rates in the garb of controlling inflation that has damaged the country," he told reporters in Parliament House. 

The Governor's actions have "led to collapse of industry and rise of unemployment in the economy", he said. "The sooner he is sent back to Chicago, the better it would be." 

Rajan is the on-leave Professor of Finance at the University of Chicago's Booth School of Business. 

After assuming charge as RBI governor in September 2013, Rajan gradually raised the short-term lending rate from 7.25 per cent to 8 per cent 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 it has come down by 1.50 per cent to 6.50 per cent.  

"We should kick out the RBI governor. His term is ending in September. But why wait till September? He's unfit for India. His prescription is like that of a doctor who sees a patient in high fever and says that the only way I can bring down the temperature is to kill him. The only way you can bring down inflation is to kill the industry," Swamy said in an article in Businessworld magazine.

Swamy also said, "People who come from IMF-World Bank backgrounds have no dynamism at all".

While India Inc has criticised Rajan for his cautious stance in reducing interest rates, economists have approved his restrained approach at a time when global markets were in a turmoil, a Business Standard column said appreciating Rajan's efforts

'Rajan has been at the striking end fighting from one crisis to another since the day he took over as the governor,' the column said.

The government is yet to state whether Rajan will get a second term as RBI governor.

Photograph: Reuters

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