Subramanian Swamy draws fire for ‘Rajan, go back!’ attack

NEW DELHI, MAY 12:  

Newly-nominated Rajya Sabha MP and BJP leader Subramanian Swamy’s attack on Reserve Bank of India Governor Raghuram Rajan has created a firestorm. While the Congress urged the BJP to stop attacking Constitutional authorities, banking industry experts and economists feel the RBI Governor is doing “exceedingly well” in the current scenario.

Addressing reporters here on Thursday, Swamy blamed Rajan’s actions for the collapse of industry and rise of unemployment in the economy. “The sooner he is sent back to Chicago, the better it would be,” the veteran MP said.

Earlier, he accused the RBI Governor of doing a bad job. “I don’t want to speak much about him. He has hiked interest rates in the garb of controlling inflation, which has damaged the country,” he said.

Bankers differ

V Kannan, former Chairman and Managing Director of Vijaya Bank, said there was absolutely no case for Rajan to be relieved of his duties.

He pointed out that the RBI Governor had performed exceedingly well in three critical areas — containing inflation (a mandate given to the Central Bank Governor), ensuring orderly change in the foreign exchange market, and bringing credibility to the Indian banking system (through a clean-up of balance sheets).

“Now the confidence of the Indian banking system is back and Rajan’s performance has been excellent,” Kannan added.

The RBI Governor has ensured that headline inflation has come down from a level of over 9 per cent when he began his tenure in 2013, to around 5 per cent now.

He has been cutting the repo rate (the rate at which the RBI lends to banks) although it has not been purely in line with the expectations of the Centre and the BJP.

Congress spokesperson, MP and IIM Professor Rajeev Gowda flayed Swamy for “tarnishing” a world-renowned economist. “The BJP has no respect for institutions. We reject his comments against the RBI Governor with all the contempt that it deserves. If the BJP is taking shelter behind such loose cannons, it reflects the poor state of affairs in that party and in the government,” he added.

Rajan has also been facing similar criticism from high-ranking BJP functionaries and ministers for his remark that the Indian economy was similar to a “one-eyed king leading the blind”, when asked to comment on it being a bright spot in a struggling world economy.