Senior BJP leader Yashwant Sinha on Friday said that RBI governor Raghuram Rajan’s statements are also responsible for the controversy around him. The RBI governor isn’t the PM or FM, he has a very well defined role in the system, Sinha told ET Now.
Yashwant Sinha said that India is too big a country to be dependent on one individual. “Media reports predicting doom for India due to Rajan’s exit are exaggerated,” added Sinha.
On June 18, buffeted by political attacks, including by BJP MP Subramanian Swamy, coupled with unending speculation over his continuance, Rajan had said no to a second term — a surprise decision the industry and opposition parties termed as a loss. He was blamed, among other things, for his focus on inflation over growth.
On the monetary front, Sinha said, “Inflation targeting good but WPI should be targeted. Tight monetary policy will achieve nothing with negative WPI.”
Sinha went on to say that monetary policy doesn’t ease food prices but hurts investment.
In its policy review meet in June, RBI Governor Raghuram Rajan kept interest rates intact, citing rising inflationary pressure, but hinted at a reduction later this year if good monsoon helps ease inflation.
DBS in a report said that revamp of the monetary policy framework, stabilising the rupee, reining in inflation, a forward-looking approach towards financial sector reforms and systematic approach in dealing with banks’ stressed assets were the key positives from Rajan’s three-year term.
