Subramanian Swamy's contention that Raghuram Rajan is acting against our economic interests and therefore he must not be reappointed as RBI Governor is plainly over the top. Swamy has taken exception to Rajan not obliging the interests of ministers and industrialists by resisting their pressure to reduce interest rates.
Contrarily, Rajan deserves to be commended for his steadfastness in tackling inflation. Swamy's argument that reduced interest rates are not inflationary will have few takers. Economics being an inexact science, there is plenty of room for contradictory views. But it is illogical and discourteous to pillory the RBI Governor for his logical actions.
Rajan is an eminent monetary economist. He knows what he is doing. Swamy questions Rajan's retention of Green Card and proffers that as proof that the latter is out to scuttle India's economic progress. This is a strange argument emanating from a pathological hatred for the person.
Rajan would be happy to get back to teaching at Chicago or wherever his proven merit takes him. Unseating him from RBI will be an unjustifiable loss for India. We don't need a sycophant as RBI Governor if that is what Swamy desires.
Added on May 26th: Rajan may even be happy if his term is not extended because the dollar value of rupee is likely to drop drastically when the FCNR deposits brought in because of Rajan's concessions when he assumed office are maturing in September and a large quantum of dollars is expected to exit the country. If Rajan stays, his ingenuity will be tested. However, he may have a trick or two up his sleeves. Swamy has thrown a googly accusing the Governor of protecting Chidambaram's son from consequences of his violation of foreign exchange guidelines. This is an allegation that cannot be dismissed lightly.
Contrarily, Rajan deserves to be commended for his steadfastness in tackling inflation. Swamy's argument that reduced interest rates are not inflationary will have few takers. Economics being an inexact science, there is plenty of room for contradictory views. But it is illogical and discourteous to pillory the RBI Governor for his logical actions.
Rajan is an eminent monetary economist. He knows what he is doing. Swamy questions Rajan's retention of Green Card and proffers that as proof that the latter is out to scuttle India's economic progress. This is a strange argument emanating from a pathological hatred for the person.
Rajan would be happy to get back to teaching at Chicago or wherever his proven merit takes him. Unseating him from RBI will be an unjustifiable loss for India. We don't need a sycophant as RBI Governor if that is what Swamy desires.
Added on May 26th: Rajan may even be happy if his term is not extended because the dollar value of rupee is likely to drop drastically when the FCNR deposits brought in because of Rajan's concessions when he assumed office are maturing in September and a large quantum of dollars is expected to exit the country. If Rajan stays, his ingenuity will be tested. However, he may have a trick or two up his sleeves. Swamy has thrown a googly accusing the Governor of protecting Chidambaram's son from consequences of his violation of foreign exchange guidelines. This is an allegation that cannot be dismissed lightly.
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