New Delhi: Backing Subramanian Swamy's demand of RBI Governor Raghuram Rajan's oust, Commerce Minister Nirmala Sitharaman has also disagreed with Rajan's economic policies saying that hiking interest rates to tackle inflation has severely affected small and medium scale industries.
In an exclusive interview to NewsX, the minister asserted that the fiscal regulatory environment in the country has affected the growth of industry and commerce, as interest rates do have a bearing on the cost competitiveness of the industries. "Rajan's policies need to be revisited", said the minister.
Subramanian Swamy had earlier written a letter to the Prime Minister Narendra Modi complaining about the governor and arguing against an extension for him. Swamy, who recently became a BJP member of the Rajya Sabha, has said the RBI governor is "mentally not fully Indian" and accused him of an "apparently deliberate attempt to wreck the Indian economy".
Since January 2015, the RBI had cut the repo rate, the key policy rate, by 150 basis points. However, the government, under pressure to hasten economic growth, had wanted the pace of easing to be faster and sharper. Many Indian economists have also said that Rajan should have been faster with rate cuts. The payment of surplus to the government has also been a thorny issue between the government and RBI in the past.