In a strongly worded letter to the Prime Minister Narendra Modi, Rajya Sabha MP Dr. Subramanian Swamy has accused the RBI governor Dr. Raghuram Rajan of wrecking the Indian economy and has sought his immediate resignation.
Dr. Raghuram Rajan will see his term end in September this year. Voices have been getting louder whether he should be given a second chance at boosting the economy. Dr. Rajan is a world-renowned economist and was earlier conferred the “governor of the year” award.
Dr. Rajan is also credited for controlling the inflation monster, and taking measures such as the cleaning up of the PSU banks’ balance sheets to reduce the risk of bad loans toppling the economic progress.
In the letter, Subramanian Swamy states,
“The reason why I recommend this is that I am shocked by the willful and apparently deliberate attempt by Dr. Rajan to wreck the Indian economy. For example, the concept of containing inflation by rising interest rates is 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.”
Mr. Swamy also said that the governor was ‘acting more as a disruptor of the Indian economy’ and was ‘not fully Indian’.
In our view, Mr. Rajan has been playing a constructive role in strengthening the economy from the roots. His departure would be a big blow to the Indian economy, and would derail the clean-up process in the banks.