1. Raghuram Rajan ‘mentally not fully Indian’; remove him as RBI governor: Subramanian Swamy writes to PM Modi

Raghuram Rajan ‘mentally not fully Indian’; remove him as RBI governor: Subramanian Swamy writes to PM Modi

Subramanian Swamy in his letter to PM Narendra Modi has alleged that Raghuram Rajan is "mentally not fully Indian" and has "wilfully" wrecked the economy.

By: | Updated: May 17, 2016 1:08 PM
Raghuram Rajan, Subramanian Swamy, Swamy letter to PM Modi, Swamy on Raghuram Rajan Subramanian Swamy wrote to PM Narendra Modi saying, “Governor Raghuram Rajan is hurting Indian economy.”

Lashing out at Raghuram Rajan for “wrecking” the Indian economy, BJP MP from Rajya Sabha Subramanian Swamy has written to Prime Minister Narendra Modi, seeking immediate removal of the RBI governor.

Swamy wrote to PM Modi saying, “Governor Rajan is hurting Indian economy. The concept of containing inflation by raising interest rates is disastrous.”

“I have written to the PM about Rajan. Why should we retain a UPA appointee? He (Rajan) believes in raising interest rates to decrease inflation. This approach harms the small and medium industries a lot. These SMEs are the ones that generate jobs for the common man. Industrial growth is in negative because they (SMEs) are shut. This approach is like murdering someone suffering from fever, so that his body temperature drops,” Swamy said while explaining the contents of his letter.

Subramanian Swamy has alleged that Rajan is “mentally not fully Indian” and has “wilfully” wrecked the economy. “The reason why I recommend this is that I am shocked by the wilful and apparently deliberate attempt by Dr Rajan to wreck the Indian economy,” he wrote adding his concept of raising interest rates to contain inflation was “disastrous.” (Also read: Rajan’s 2nd term as RBI governor: From yes he could, to what he should do if re-appointed)

Also, bad loans with public sector banks has doubled to Rs 3.5 lakh crore in two years, he said.

“These actions of Dr Rajan lead me to believe that he is acting more as a disrupter of the Indian economy than the person who wants the Indian economy to improve. “Moreover he is in this country on a Green Card provided by the US government and therefore mentally not fully Indian. Otherwise why would he renew his Green Card as RBI Governor by making the mandatory annual visit to the US to keep the Green Card current?” he wrote.

Rajan, Swamy said, was “acting more as a disrupter of the Indian economy than the person who wants the Indian economy to improve.”

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.

Swamy has always been a harsh critic of Rajan, and recently said that the RBI governor was not suited for India.

“Mujhe lagta hai RBI Governor hamare desh ke liye anukool nahin hain (I don’t think the RBI governor – Rajan – is fit for India),” Swamy had told ANI.

“The way he has raised interest rates saying that inflation will be curbed, the country has suffered because of this,” Swamy said. “Issey berozgaari badh gayi hai, usko jitna jaldi chutti karke Chicago bhej sakte ho, bhejna chahiye (His policies have resulted in increased unemployment. The sooner he goes to Chicago, the better),” he added.

Amid speculation about a possible second term for Rajan, Finance Minister Arun Jaitley on Monday declined to be drawn into the matter, but said there is a “mature relationship” between the central bank and the government. Rajan’s first term as RBI governor ends in September.

To a question whether Rajan is getting an extension, he quipped “these are not issues which we discuss through the media.”

Indicating his interest in a second term, Rajan on May 13 had said he has enjoyed every moment of the job, but there is “more to do”, despite calls from some sections of the ruling BJP against any extension for him.

Rajan, who had earlier also served as the Chief Economist of IMF and is known as a key commentator on financial issues globally, is the on-leave Professor of Finance at University of Chicago’s Booth School of Business.

(With inputs from PTI)

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  1. M
    May 17, 2016 at 8:19 am
    Swamy has thown a ball to hit Jaitly. Let us wait and watch for reuslts
    1. D
      May 17, 2016 at 7:44 am
      Since green card is being seen as a key reason to test Indianness, better use the same logic against all public servants, who hold green cards including by their close family members. It's also time that India government brings a law on defining, recognising and dealing with conflict of interests of every kind including of professionals like lawyers, journalists, teachers, doctors, chartered accountants, independent directors, retired civil servants, military officials, police officials.
      1. Suresh Deman
        May 17, 2016 at 10:33 pm
        Subramaniam Swammy is quite well known for creating controversies just to catch media attention. He was a Professor of Economics at the IIT, but being unfit in academia he had entered into politics in 1970s by joining right wing Hindu political Party then known as Jan Sangh. The only known academic article he ever wrote was in Economic Development & Cultural Change on India-China Comparison in 1960s. His polemics is outrageous, full of innuendos & defamatory overtones. He did not even hesitate to malign a world renowned statistician Prof CR Rao when he was the Director of ISI in Delhi and he also engaged in erroneously malicious campaign in 1980s in US universities against Prof AK Sen bing him as a Naxalite to stall his nomination for a Noble Prize. Business as usual Swammy does not hesitate to meddle in every area he knows very little if nay about them. In 1980s he accepted an invitation to partited in a symposium on the 'Writing of Historiography' along with JNU Profs Vipin Chandra, Romila Thapar and others organised at the Delhi University. Prof Vipin Chandra clified historiographers into various categories as (i) international, (ii) national, (iii) Progressive, (iv) communal and then he said there is a fifth category of historiographers which is and Subramaniam Swammy belings to the last category. Crowed cheered with a round applause. Recent attack on Prof Raghuram Rajan is one of the series of previous tirades in which Swammy has been engaged for the last 40 years. Rajan is a well known economist who raised serious concerns about the economic order despite a vote of confidence expressed by all shades of economists. Prof Paul Krugeman, a Noble Laureate was the first to acknowledge Rajan's concerns when 2008 crises hit around the world. He put very eloquently as follows: "There was a telling moment in 2005, at a conference held to honor Greenspan’s tenure at the Fed. One brave attendee, Raghuram Rajan (of the University of Chicago, surprisingly), presented a paper warning that the financial system was taking on potentially dangerous levels of risk. He was mocked by almost all present — including, by the way, Larry Summers, who dismissed his warnings as “misguided.” Rajan accepted the job as RBI Governor under UPA II and tried to keep the macroeconomic stability and continued his efforts to keep it going. Low commodity and crude prices also helped. However, right wing pro-American economist thinks Rajan as a hurdle in their way to make India "Free for foreign Loot". Swammy hides behind Rajan's Green Card about he does not take the same issue with Panagariya of NITI AYOG & Arvind Subrmaniam Adviser to Modi who are not only Green Card holders but American Citizens. At the face of evidence Rajan is less likely to sell of Indian interest than the other two who openly advocating pro-American economic policies. It appears, US lobby is clandestinely operating get rid of Rajan to pave way to their interests
        1. S
          May 18, 2016 at 1:09 am
          Ridiculous!!!! This swamy is crazy! Rajan does good Analysis. He is the one who did predict the economic crisis in 2008.
          1. S
            SITARAM mani
            May 17, 2016 at 9:12 am
            Subbu sometimes behaves like a mad cap. Ignore him.
            1. v
              May 17, 2016 at 7:57 am
              those hurt by compulsory disclosure of wilful defaulters list is behind this foul mouth. they find it difficult to squeeze more from Indian banking system any further. if norm set by governor got implemented, many more mally's will be forced in exile. so is all these cries.
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