Bhagwati tells Modi to retain Rajan as RBI governor

Noted economist Jagdish Bhagwati has asked Modi to hold regular meetings to communicate his development agenda and work closely with Rajan

GN Bureau | May 20, 2014



Known for showing his unflinching support to prime minister designate Narendra Modi, noted economist Jagdish Bhagwati has suggested retaining Raghuram Rajan as the governor of Reserve Bank of India amid speculation that he could be asked to leave by the new government.
According to media reports, Bhagwati termed BJP’s win as an astonishing triumph of Modi and asked him to hold regular conferences to outline his development agenda in public and work in coordination with Rajan.

“Unlike the UPA leaders, the new PM, who is not tongue-tied, should hold monthly press conferences where he can bring in his agenda and actions before the public and carry them with him,” Bhagwati said.

In the past few months, BJP leaders, including party treasurer Piyush Goyal and senior leader Subramanian Swami have attacked Rajan for his inability to tame inflation. However, Bhagwati does not quite agree with the idea of sacking the RBI governor as the solution to the problem of persisting inflation.

“I also believe that he (Modi) ought to keep Raghuram Rajan. He is a major economist who commands international respect,” Bhagwati added.
Meanwhile, Rajan tried to downplay the problem and had recently asserted the independence of the central bank.

Rajan had said, “I determine the monetary policy. I say what it is. The government can fire me but the government doesn't set the monetary policy. I am happy to talk to the government but ultimately the interest rate that is set is set by me.”  

 

 

Comments

 

Other News

AI: Code, Control, Conquer

India today stands at a critical juncture in the area of artificial intelligence. While the country is among the fastest adopters of AI in the world, it remains heavily reliant on technologies developed elsewhere. This paradox, experts warn, cannot persist if India seeks technological sovereignty.

RBI pauses to assess inflation risks, policy transmission

The Reserve Bank of India (RBI) has begun the new fiscal year with a calibrated pause, keeping the repo rate unchanged at 5.25 per cent in its April Monetary Policy Committee (MPC) meeting. The decision, taken unanimously, reflects a shift from aggressive policy action to cautious observation after a signi

New pathways for tourism growth

Traditionally, India’s tourism policy has been based on three main components: the number of visitors, building tourist attractions and providing facilities for tourists. Due to the increase in climate-related issues and environmental destruction that occurred over previous years, policymakers have b

Is the US a superpower anymore?

On April 8, hours after warning that “a whole civilisation will die tonight,” US president Donald Trump, exhibiting his unique style of retreating from high-voltage brinkmanship, announced that he agreed to a two-week ceasefire with Iran. The weekend talks in Islamabad have failed and the futur

Machines communicate, humans connect

There is a moment every event professional knows—the kind that arrives without warning, usually an hour before the curtain rises. Months of meticulous planning are in place. And then comes the call: “We’ll also need a projector. For the slides.”   No email

Why India is entering a ‘stagflation lite’ phase

India’s macroeconomic narrative is quietly shifting—from a rare “Goldilocks” equilibrium of stable growth and contained inflation to a more fragile phase where external shocks are beginning to dominate domestic policy outcomes. The numbers still look reassuring at first glance: GDP


Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter