NDA govt. does not deserve Rajan, says Chidambaram

"Each one approaches economy from his/her own perspective. Government’s perspective is growth. Central bank’s perspective is monetary stability."

May 28, 2016 03:28 pm | Updated November 17, 2021 05:09 am IST - New Delhi

“I am beginning to think whether this government deserves Rajan,” P. Chidambaram replied, when asked if RBI governor Raghuram Rajan should be given a second term.

“I am beginning to think whether this government deserves Rajan,” P. Chidambaram replied, when asked if RBI governor Raghuram Rajan should be given a second term.

The former Finance Minister, P. Chidambaram, on Saturday questioned the NDA government’s claim that ease of doing business had improved under it. “We think that ease of doing business has not been made easier because of an atmosphere of suspicion…” he said.

Assessing the state of the economy on the second anniversary of the government, Mr. Chidambaram was responding to remarks by the U.S. Republican Party’s rising star and Governor of South Carolina, Nikki Haley, that a “powerful” official system and a need for foreign companies to “know someone” in the government was making U.S. companies “nervous” about investing in India.

Asked whether social tension had resulted in an economic slowdown, he said that unless the minorities, farmers, Dalits and weaker sections felt secure, they would not be able to effectively participate in producing goods and services.

‘Outstanding economist’

As for BJP MP Subramanian Swamy’s attack on RBI Governor Raghuram Rajan, Mr. Chidambaram said he wondered whether the NDA government “deserves” Dr. Rajan, describing him as “one of the most outstanding economists in the world.” “The UPA government appointed one of the most outstanding economists of the world as the RBI Governor. We placed full confidence in him at that time and we continue to place full confidence in him today.”

Asked if as Finance Minister, he too had reservations about Dr. Rajan’s stand on interest rate, Mr. Chidambaram said the UPA government had enjoyed good relationship with all RBI Governors, including the current one. “World over, the Finance Minister and the central bank governor engage in such a dialogue. It does not mean the Finance Minister questions the competence of the RBI Governor… Each one approaches the economy from his or her own perspective. The government’s perspective is growth; the central bank’s is monetary stability.”

GDP figures

Earlier, Mr. Chidambaram questioned the methodology used by the NDA government to calculate the GDP. “There is a growing dichotomy between the GDP numbers and the other economic indicators. If calculated under the methodology of the old series, the estimate for 2015-16 would be about five percent and not 7.6 per cent. The average citizen needs jobs and incom

Stressing that both agriculture and industry were in distress, he said the Make in India initiative was a non-starter, and inflation was rising. The Supreme Court, he pointed out, had “chastised the government” for failure to manage “the consequences of two years of drought.”

To a query on the overturning by the Centre of the “saffron terror” cases, he said there was a pattern in it.

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