‘Will people deposit at 4%? Low interest rates not a god-given right’
business Updated: Jun 09, 2016 08:58 IST
NEW DELHI: Facing criticism over his move to keep interest rates unchanged, Reserve Bank of India (RBI) governor Raghuram Rajan on Wednesday said banks can’t lend at 4% and pay 6% on deposits. “People want rates down, but will they deposit at 4%? No. Low interest rate is not a god-given right,” Rajan told television channels in different interviews.
Refusing to comment on intense speculation over his tenure extension, Rajan said he has very “cordial” relation with finance minister Arun Jaitley, and his long-term desire is to go back to the academia.
“I cannot confirm or deny. As the FM has said, wait for the announcement. My tenure is till September 4. So between now and then the announcement will come. My long-term desire is to go back to academia for teaching, for research and for thinking. This would be my best destination.”
On BJP MP Subramanian Swamy’s comment that he is “mentally not fully Indian”, the RBI governor said :“There are certain allegations, which are fundamentally wrong and base less” and addressing them would amount to giving them legitimacy. “I think when you think about Indianness, when you think about love for your country, it’s a very complicated thing. For every person there is a different way that you show respect for your country... my mother-in-law will say karmayogi is the way to go do your work.”
Confident about India’s growth picking up further with “more animal spirit” and good monsoon, Rajan said the economy is on the right track, but there was still “work to do”. “We can celebrate when we see private investment strongly back on track. I think we are capable of much stronger growth than what we have right now.”
On the controversy surrounding the GDP numbers based on the new calculations, Rajan said statisticians have done as good a job as they can.