BJP leader and Rajya Sabha MP Subramanian Swamy has taken his fight with RBI governor Raghuram Rajan to Prime Minister’s doorstep, requesting Narendra Modi to terminate the appointment of the head of India’s central bank who was “mentally not fully Indian”.
In a letter to Modi, Swami alleged that Rajan was willfully and deliberately wrecking the Indian economy. Crying foul about his recent decision, Swami said his actions made him believe that Rajan was acting as a disrupter of the Indian economy than a person who wants the economy to improve.
“The reason why I recommend this is that I am shocked by the wilful and apparently deliberate attempt by Dr Rajan to wreck the Indian economy,” he wrote adding his concept of raising interest rates to contain inflation was “disastrous.” Also, bad loans with public sector banks has doubled to Rs 3.5 lakh crore in two years, he said.
Rajan was appointed RBI Governor by the previous UPA government in September 2013 for a three-year term, which can be extended.
“These actions of Dr Rajan lead me to believe that he is acting more as a disrupter of the Indian economy than the person who wants the Indian economy to improve. “Moreover he is in this country on a Green Card provided by the US government and therefore mentally not fully Indian. Otherwise why would he renew his Green Card as RBI Governor by making the mandatory annual visit to the US to keep the Green Card current?” he wrote.
Swamy’s letter to the PM comes a week after Swamy suggested that am Rajan be removed from the post as he was responsible for “unemployment and collapse” of industrial activity.
“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,” he told reporters in Parliament House on 12 May, 2016.
The governor’s actions have “led to collapse of industry and rise of unemployment in the economy”, he said. “The sooner he is sent back to Chicago, the better it would be.”
Rajan is the on-leave Professor of Finance at the University of Chicago’s Booth School of Business.
After assuming charge as RBI governor in September 2013, Rajan gradually raised the short-term lending rate from 7.25% to 8% and had retained the high rates throughout 2014.
He kept the rates high, citing inflationary concerns despite intense pressure from the finance ministry and the industry for softening them with a view to boosting growth.
The governor began the process of lowering the rates in January 2015 and since then it has come down by 1.50% to 6.50%.
Swamy in the letter to Modi said the BJP came to power under his inspiring leadership. “I cannot see why someone appointed by the UPA Government who is apparently working against Indian economic interests should be kept in this post when we have so many nationalist minded experts available in this country for the RBI Governorship.”
He urged Modi “to terminate the appointment of Dr Raghuram Rajan in the national interest.”
Swamy, who was earlier this month nominated to Rajya Sabha by the BJP government, said Rajan’s concept of containing inflation by raising interest rates was “disastrous.”
“When the Wholesale Price Index (WPI) started to decline due to induced recession in the small and medium industry, he shifted the target from WPI to the Consumer Price Index (CPI) which has not however declined because of retail prices. On the contrary it has risen.
“Had Dr Raghuram Rajan stuck to WPI interest rates would have been much lower today and given huge relief to small and medium industries. Instead they are squeezed further and consequent increasing unemployment,” he wrote.
Rajan, Swamy said, was “acting more as a disrupter of the Indian economy than the person who wants the Indian economy to improve.”