Stating that the challenge is keeping a check on rising NPAs, AV Rajwade, Forex & Risk Management Consultant, AV Rajwade & Co told BTVI that Raghuram Rajan is behind the curve in providing growth. Rajan has been criticised by India Inc and various experts for not cutting rates. In his defence, Rajan in an interview with ET Now said, “The debate around interest rates was not ill-informed, but it was more a process of trying to educate the public. You have to take people along on your decisions.” “Experts have said in the past that India is special and India is different and there is no need to follow a certain set of policies. I had to convince people, give them the right arguments,” he said. “I have been trying to tell people that the industry is best served in a low inflation environment,” Rajan said when asked about India Inc’s clamour for rate cut. “You have to understand the monetary policy is like juggling 6 balls. it’s like 6 balls connected with elastics; when you pull one more, the other is impacted,” Rajan added.
Even Subramanian Swamy criticised Rajan for not cutting rates. He said “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”. In his last monetary policy review on Tuesday, Rajan maintained status quo on key rates. Being the governor of RBI is a big responsibility, he said.
“I impact the lives of the people of this country with the decision that I take on interest rates and inflation. So, it’s a big responsibility,” Rajan said. Asked about inflation targeting and its relevance, Rajan said, “I am not an inflation nutter. Medium-term inflation targeting is what we are eyeing. The glide path for bringing inflation down has been adjusting according to the conditions in the economy.” “We are fairly broad-minded. I think inflation is a very important goal of the central bank. No central bank in the world has moved away from inflation targeting,” he said.