Was open to extension, attacks vitiated atmosphere: Rajan

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New Delhi, Aug 10 (IANS) With 27 days left for his three-year term at the Reserve Bank of India (RBI) to draw to a close, Governor Raghuram Rajan on Wednesday said he was “open” to the idea of an extension, but talks with the government had not reached a stage to consider the prospect.

In interviews to TV channels, including ET Now and CNBC-TV18, a day after his last policy update, Rajan said 90-95 percent of the tasks he had set for himself had been completed, though he would have also liked to finish the remaining agenda, notably the clean-up of banks’ balance sheets.

“That does not mean in any way, that I was absolutely hell bent on having a second term,” said the outspoken governor. “I was open for staying a little while longer to see them complete, but at the same time, I was perfectly happy to go,” he said.

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In another interview, he said: “There was a process of dialogue with the government and dialogue eventually didn’t reach a place where we could agree that I would stay on. That is essentially what happened.”

He also gave a philosophical answer to the question on extension: “What is left to be done is to see it (unfinished agenda) through and that also requires thinking, that also requires changes. But that is also a much longer-term issue and this job is never done.”

Rajan was more direct on the issue of extension than he was in his letter to the RBI staff.

“While I was open to seeing these developments through, on due reflection, and after consultation with the government, I want to share with you that I will be returning to academia when my term as governor ends on September 4, 2016,” he had said in the letter of June 18.

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In the TV interviews, Rajan was also asked about the personal attacks on him, especially by BJP MP Subramanian Swamy. The IIT-Delhi alumnus did not take any names but said he put them aside and did not pay any attention to them.

“Criticism of policy, I think is perfectly fine. Allegations — ad hominem allegations — which impute motives of corruption, etc, without any basis, essentially vitiate the atmosphere in this country and without a good atmosphere you can’t get economic progress,” he said.

Asked if he felt he was let down by the government by not coming out in support in the manner it could have, he fumbled a bit and replied: “I don’t dwell on that.”

Rajan, who is going back to academics after his term ends on Sep 4, also said that if the people who attacked him had the power, they could have stopped him. “I’ve had absolute freedom in what I wanted to do. I’ve had great relationship with the old government and the people who matter now.”

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What, he feels, remains is a well functioning Monetary Policy Committee to broadly guide the central bank, especially in dealing with inflation, and a complete clean-up of banks’ balance sheets.



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