Amid a widespread perception about differences between the Reserve Bank of India and the government, Prime Minister Narendra Modi, on Thursday, praised Governor Raghuram Rajan for being 'perfect' in explaining to him complex economic issues, and said there was similarity in thinking on both sides.
Stating that Dr. Rajan would explain implications of RBI’s policies in 'just three-four slides', Mr. Modi also said that he must have been a very good ‘teacher’ in the past.
Dr. Rajan, who has been Professor of Finance at University of Chicago and joined the RBI as its Governor in September, 2013, said on his part that there had always been a 'constructive dialogue' between the RBI and the government.
There have been talks from time-to-time about differences between the central bank and the government on a range of issues, including on inflation and interest rates.
While the government and the RBI have always maintained that there were ‘no differences’ between them, some proposals in this year’s budget indicated shifting certain functions out of the central bank’s ambit, including on the public debt management.
Speaking at a function to mark 80 years of the RBI, Mr. Modi expressed satisfaction over the role played by the central bank under Dr. Rajan. “There is lot of similarity between the thinking of the RBI and the government...This is absolutely essential. As a representative of the government, I express my satisfaction. The RBI is performing its role, and I congratulate Raghuram ji and his team,” he said.
At the same function, Finance Minister Arun Jaitley also congratulated Dr. Rajan, his team and past RBI governors for their contribution in making the country’s economy resilient.
Mr. Modi said he himself was not adept at understanding economic issues, but as the Prime Minister he had to learn and understand complex issues.
