Reserve Bank of India (RBI) governor Raghuram Rajan on Wednesday described Prime Minister Narendra Modi as being “ahead of us” but said his visits abroad need to be backed up with “action on the ground”.
“I think it (the world view of India in the aftermath of Modi’s foreign visits) is changing positively,” Rajan said in an interview to NDTV.
Stating that Modi is a “very articulate spokesman for India”, Rajan said, “What we need to do is back up his visits with action on the ground which reinforces the good impression that is created.”
The RBI governor also acknowledged the Prime Minister’s initiative to market India as an investment destination. “I think he (Modi) is ahead of us. So we have to come up to speed in a number of dimensions. For example, if the idea of India as a strong economy is sold outside and they come in, and they don’t find the ease of doing business, the permissions, etc. people aren’t (happy),” he said.
The RBI governor also said he was not interested in heading the International Monetary Fund after finishing his term as India’s central bank chief. “It’s not a job I have applied for,” he said.
Though emphasising that the relationship between the RBI and the government has been strong, Rajan said that he did not always agree with the finance minister’s point of view. “Otherwise, the public should start getting worried that the central bank is becoming too acquiescent. In a sense we have to be a gatekeeper and sometimes say no!” the RBI governor added.
Meanwhile, in another interview to Doordarshan, Rajan said banks have room to cut lending rates further. The RBI on Tuesday reduced repo rate — the rate at which banks borrow from the central bank — by 0.50 percentage points to 6.75%.
(PTI & Reuters)