Differences with BJP a media speculation: Raghuram Rajan

Last Updated: Friday, April 11, 2014 - 15:40

Washington: 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 percent 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 percent 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 percent now the run rate of 1 percent," he said an event organised by Brookings Institute here Thursday.

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 percent of GDP.

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

PTI

First Published: Friday, April 11, 2014 - 15:40

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