Praising outgoing RBI governor Raghuram Rajan, former central bank chief D Subbarao has said that "Rajan's legacy is rich and of immense contribution"
Praising outgoing RBI governor Raghuram Rajan, former central bank chief D Subbarao has said that “Rajan’s legacy is rich and of immense contribution”. In an interview to ET Now, Subbarao said, “Raghuram Rajan’s efforts will continue to have an impact on the macro economy.” Talking about inflation and RBI’s role, Subbarao said, “I hope RBI will balance between supporting growth and restraining inflation.” Subbarao also said he is not surprised corporates are asking for lower interest rates.
In the past as well, Subbarao has appreciated Rajan’s policies and has even said that his (Rajan’s) continuance as RBI governor would have benefited India. “I can say I was surprised by Governor Rajan’s decision to not be considered for the appointment (extension of his term). I think he had done a great job, and that our macroeconomic management would have benefited immensely if he had continued,” Subbarao had said.
Subbarao has also admitted that the “action or inaction” of RBI during his tenure, could have been among reasons for the present bad loan crisis. “NPA problem is getting bigger than any of us has thought it might be. Looking back at the benefit of hindsight, I believe I should have addressed the problem of NPA,” he said. The central bank in its recent financial stability report has warned that the NPA situation may actually worsen. RBI did not rule out NPAs crossing 8.5 per cent by March 2017 under its base case scenario.