In a recently published article, Bhartiya Janata Party (BJP) lawmaker Subramanian Swamy, the newly-nominated member of Indian Parliament’s Upper House (Rajya Sabha), hit out at RBI Governor Raghuram Rajan.
His displeasure with Rajan comes in the wake of the RBI head’s reluctance to lower interest rate (also repo rate) for six months, citing high inflation.
The repo rate was slashed by 0.25 per cent last month, after the 0.5 per cent cut in September last year.
“…one of the biggest problems we have today is a high interest rate. Raghuram Rajan gives textbook — that too written in Chicago – prescriptions. He doesn’t understand that in their country they can raise a quarter per cent interest rate. For us, it’s life and death. The prime lending rate is already 12 per cent. And then you go on raising interest rates, and the small and medium industries are on the verge of collapse,” Swamy wrote.
He then demanded sacking of Rajan.
“We should kick out the RBI governor. His term is ending in September. But why wait till September? He’s unfit for India. His prescription is like that of a doctor who sees a patient in high fever and says that the only way I can bring down the temperature is to kill him. The only way you can bring down inflation is to kill the industry.”
Swamy also lashed at Rajan’s international exposure, and said:
Rajan’s term will end in September and the government has not yet made it clear whether he will get a second term.
A media report has termed Rajan’s performance as mixed bag. While some in India Inc have criticised him for not cutting interest rates, experts have lauded his cautious approach because of volatility in global markets.