New Govt should respect Rajan’s appointment: Chidambaram

Reserve Bank Governor Raghuram Rajan had last month dismissed the talks about his differences with BJP as “media invention.”

Updated - November 16, 2021 09:48 pm IST

Published - May 05, 2014 06:17 pm IST - Astana/New Delhi:

The new government should respect the appointment of Reserve Bank Governor Raghuram Rajan, who was selected to head the central bank on the basis of his reputation, Finance Minister P Chidambaram has said.

His comments to Bloomberg on the sidelines of ADB’s annual conference at Astana, Kazakhstan, come amid media speculation that the BJP-led NDA may not be keen to retain Dr. Rajan as RBI Governor.

Dr. Rajan had last month dismissed the talks about his differences with BJP as “media invention”, saying “I haven’t had any discussion with the new government. I think its all press-invented difference. I think it should be seen as speculation rather than any actual differences“.

His comments came against the backdrop of certain BJP leaders questioning his policies to deal with the current economic woes.

During the 8-month stint, Dr. Rajan has >raised key policy rates thrice by 0.25 per cent each.

In an interview to CNBC at Astana, Chidambaram said: “I have done more heavy lifting in the last 12 months than the RBI... I have done what needs to be done on the fiscal side, the central bank has done what needs to do on monetary side. Now we have to address the supply side constraints“.

Answering questions on growth, the Minister said Indian economy will pick up pace and will grow at 6 per cent in the current fiscal.

Mr. Chidambaram said: “We have unblocked a very large number of projects which had stalled... When the projects are completed and begin production, you will see all that adds to the economy.”

The economy grew is estimated to have grown at 4.9 per cent in the 2013—14 fiscal after touching a decade-low level of 4.5 per cent growth in 2012—13.

“As long as we have high inflation how can you ask the RBI to lower rates dramatically,” Mr. Chidambaram questioned, adding “we have to address supply side constraints. (We have to) bring down inflation before the monetary policy can come to aid of growth“.

>WPI inflation in March stood at 3-month-high of 5.7 per cent, while the >CPI or retail inflation too inched up to 8.3 per cent.

Mr. Chidambaram also said that the fiscal deficit and the current account deficit have been contained and investments have started pouring in.

In the interim Budget, he had said that the fiscal deficit would be contained at 4.6 per cent of GDP, lower than the earlier target of 4.8 per cent. The deficit in 2012—13 was 4.9 per cent of GDP.

0 / 0
Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in


Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.