Differences with BJP a media speculation: Raghuram Rajan

Reserve Bank of India Governor Raghuram Rajan. (PTI)

Brushing aside as “speculation” that he has differences with the leaders of BJP, widely expected to form the next government, Reserve Bank of India Governor Raghuram Rajan said they are “media invention”.

“On differences with the new government, I haven’t had any discussion with the new government. I think its all press
invented difference. I think it should be seen as speculation rather than any actual differences,” he said while commenting on reported differences with the BJP leaders.

Rajan’s comment comes against the backdrop of certain BJP leaders questioning his policies to deal with the current
economic woes.

BJP leader Subramanian Swamy is reported to have said: “We can make it worthwhile for him (Raghuram Rajan) to leave.”

Expressing similar opinion BJP Treasurer Piyush Goyal attacked Rajan over a series of interest rate hikes intended
to curb inflation, now at double the RBI’s longer-term 4 per cent target, at a time when economic growth has fallen to its
slowest in a decade.

During the 7-month stint, he has raised key policy rate thrice by 0.25 per cent each.

Rajan was appointed RBI Governor in September 2013 by Congress led UPA which is expected to perform poorly in the
ongoing general election. The new government is expected to be in place after May 16 results.

On improvement in parameters like current account deficit (CAD), moderation in inflation, the Governor said: “the success belongs entirely to the Finance Ministry and not to the Reserve Bank of India. We work together and I think one of the benefits is that there is a greater sense of comfort on fiscal consolidation.

“I think signal biggest factor in the stabilisation of the external market was the current account deficit came down
significantly from north of 5 per cent now the run rate of 1 per cent,” he said an event organised by Brookings Institute
here yesterday.

CAD is expected to come down about USD 35 billion in 2013-14 from a record high of USD 88.2 billion or 4.8 per cent of GDP.

At the same time, Wholesale Price Index based inflation eased to 9-month low of 4.68 per cent in February, while retail inflation slowed to 25-month low of 8.1 per cent.