INTENSIFYING his campaign for the removal of Reserve Bank of India (RBI) Governor Raghuram Rajan, BJP’s new Rajya Sabha MP Subramanian Swamy has written to Prime Minister Narendra Modi, urging him to “terminate” his services “effective immediately” or when his term ends in September because he was “mentally not fully Indian”.
In the letter dated May 16, Swamy said he was “shocked at the wilful and apparently deliberate attempt by Dr Rajan to wreck the Indian economy”. He said that “the concept of containing inflation by rising interest rates is disastrous”.
“When the Wholesale Price Index (WPI) started to decline due to induced recession in the small and medium industry, he shifted the target from WPI to Consumer Price Index (CPI) which has not however declined because of retail prices. On the contrary, it has risen. Had Dr Raghuram Rajan stuck to WPI, interest rates would have been much lower today, and given huge relief to small and medium industries. Instead, they are squeezed further and consequent increasing further unemployment,” Swamy wrote.
At least three BJP leaders whom The Indian Express contacted did not indicate that Swamy’s letter had embarrassed the party. Two of them agreed that the issue raised by Swamy was “relevant” in today’s context.
But officially, the party tried to distance itself from Swamy, who was nominated to the Rajya Sabha last month. Maintaining that Swamy’s move was “independent”, Gopal Krishna Agarwal, party spokesperson, said that any decision on Rajan “should be taken by the government”.
“The BJP as a party has no say on it. But there is a consensus that we need to move to a low interest rate. But it’s the RBI’s decision and it is independent. Interest rate is an important component in managing inflation,” he said.
Agarwal said the government has already taken a decision to set up a monetary committee to decide on the interest rate. However, he added, “We are of the view that inflation is under control now.”
In his letter, Swamy also wrote that the amount of bad loans has gone up. “Thus in the last two years, estimated NPA in public sector banks has doubled to Rs. 3.1/2 lakhs crores,” he wrote.
The BJP MP added, “These actions of Dr Rajan lead me to believe that he is acting more as a disrupter of the Indian economy than the person who wants the Indian economy to improve. Moreover, he is in this country on a Green Card provided by the US government and therefore mentally not fully Indian. Otherwise why would he renew his Green Card as RBI Governor by making the mandatory annual visit to the US to keep the Green Card current?”
Swamy said the BJP came to power under Modi’s “inspiring leadership” in which thousands of educated persons contributed. “I cannot see why someone appointed by the UPA government who is apparently working against Indian economic interests should be kept in this post when we have so many nationalist minded experts available in this country for RBI Governor,” he wrote.
“I therefore urge you to terminate the appointment of Dr Raghuram Rajan in the national interest,” he added.
This is not the first time that Swamy has attacked Rajan for the alleged failure of his policies. On May 12, Swamy had said: “In my opinion, the RBI Governor is not appropriate for the country. I don’t want to speak much about him. He has hiked interest rates in the garb of controlling inflation that has damaged the country. His actions have led to collapse of industry and rise of unemployment in the economy. The sooner he is sent back to Chicago, the better it would be.”
Asked about Swamy’s letter, Finance Minister Arun Jaitley told ET Now channel that the government and RBI are responsible institutions and decisions will be taken without being influenced by “any other factor”.
“I think what is important are issues not personalities. Secondly, whether what happens to the RBI Governor second term or no second term, what his own views on the issue are, are these matters to be discussed in public?” Jaitley said.
“We will take our decisions without being influenced by any other factor,” he told the channel.
Senior Congress leader Jairam Ramesh reacted sharply to Swamy’s latest letter, and asked why he did not “hit his real target Jaitley but set up dummy targets like the RBI Governor who cannot speak out”, PTI reported.