Reiterating Prime Minister Narendra Modi’s view that a decision on extending the tenure of Reserve Bank of India (RBI) governor Raghuram Rajan would be taken at an appropriate time, minister of state for finance Jayant Sinha on Thursday said the government was committed to the independence of the central bank.
“We have a very mature relationship with the RBI. It is an institutional relationship. We believe in strengthening and protecting institutions and ensuring their independence,” said Sinha, responding to a question posed by Anant Goenka, wholetime director and head — new media, The Express Group. Goenka was hosting a discussion organised by Swaniti Initiative with Sinha about the role of elected representatives in delivering development.
Rajan’s current term as the RBI governor will come to an end in September. Already, speculation that Rajan may not opt for a second term as the RBI governor is believed to have spooked the market and contributed to the fall of the rupee, which closed 19 paise lower at `67.45 against the dollar on Wednesday.
Criticising Rajan’s policies, BJP MP Subramanian Swamy recently wrote to Modi to terminate the governor’s contract. Rajan was also criticised recently by BJP leaders, including commerce and industry minister Nirmala Sitharaman, for his choice of words in his comment that the Indian economy is a bit like the “one-eyed man” in the land of the blind.
On the economic reform agenda of the government to end poverty, Sinha said like China, India needs to grow at a faster pace for decades to eradicate poverty. China could end poverty as it was able to grow at over 9% for 30 years. India’s economy grew by 7.6% in FY16, up from 7.2% in the previous fiscal.
Sinha said the government is pro-market as it wants markets to be competitive and create jobs, wealth and a robust tax base. “If we can deliver on all these fronts, we can follow our pro-poor policy in a responsible way,” he said.
Talking about the Member of Parliament Local Area Development Scheme (MPLADS), he said it was playing a critical role in bringing development at the village level and helping curb even Naxalism in states like Jharkhand.
The Centre spends about `4,000 crore annually under MPLADS, under which each MP has the choice to suggest to the district collector works to the tune of `5 crore per annum in his constituency. Sinha said he was in favour of a higher allocation to MPs to take up development projects in rural areas, such as building roads, schools and community centres.
“Delivering on people’s expectation is a challenge. It’s a hard job,” Sinha said about the challenges before politicians, on which his father (former finance minister Yashwant Sinha) had cautioned him before he entered politics. The minister, who represents the Hazaribagh parliamentary constituency in Jharkhand, said he enjoyed his job and was enchanted by politicians like former prime minister Atal Bihari Vajpayee and current Prime Minister Narendra Modi.
About his father’s criticism of the Modi government, Sinha said the government was taking into account the valuable views of senior figures.