Former finance minister P Chidambaram on Saturday came out in support of RBI governor Raghuram Rajan, calling him “one of the most outstanding economists” in the world.
Chidambaram’s remarks came amid persistent attack on Rajan by BJP MP Subramanian Swamy .
“I am beginning to think whether this government deserves Dr Rajan,” he said, when asked whether the RBI governor should be given a second term. His three-year term ends in September.
Briefing reporters on the “failures” the NDA government in the last two years, Chidambaram parried questions on Swamy’s attack on Rajan. He said the Congress will respond only if Prime Minister Narendra Modi and finance minister Arun Jaitley speak against Rajan.
The main Opposition party on Friday dubbed Swamy’s attack against Rajan as “fascism and an assault” on the institution and not the individual.
Prime Minister Narendra Modi, on his part, told The Wall Street Journal on Friday that the issue of reappointment of Rajan was an “administrative subject” and it should not be an issue of interest to the media .
In a letter to the PM a few days ago, Swamy had asked him to sack Rajan, charging that his insistence on high interest rate had led to recession in the domestic small and medium industries, causing not only a sharp decline in output but also massive unemployment of semi-skilled labour.
But Chidambaram defended Rajan.
“The UPA government appointed one of the most outstanding economists of the world as the RBI governor. We placed full confidence in him at that time and we continue to place full confidence in him today,” he said.
Asked if as the finance minister he had reservations about Rajan’s interest rate stand, Chidambaram said the UPA government had the best of relationship with all central bank governors, including Rajan.
“The world over, finance minister and central bank governor engage in such a dialogue that it does not mean the finance minister questions the competence of the RBI governor. Each one approaches economy from his or her perspective. Government’s perspective is growth. Central bank’s perspective is monetary stability,” he said.
He also made light of commerce minister Nirmala Sitharaman’s “one-eyed king” remark against Rajan that caused controversy, saying vote can be taken on who is right and who is wrong.