No vacancy in RBI, indicates BJP

Bhagwati had come all cylinders blazing on Nobel laureate Amartya Sen when the latter had said that BJP prime ministerial candidate Narendra Modi was not fit for the top job. Bhagwati last week in an interview to a news agency stated that he ‘expected Modi to keep Reserve Bank of India governor Raghuram Rajan’ whose hawkish use of monetary policy to target stubbornly high inflation has led some in the BJP to call for his ouster.

‘On the financial side his (Modi’s) best bet is to stick with Raghu Rajan,’ Bhagwati had said, adding, ‘We really need to brake the economy, try to put a stop to its fiscal profligacy.’

On Monday, Piyush Goyal, Mumbai-based treasurer of the BJP, told a financial daily that in case the BJP comes to power, Rajan’s job was safe.  ‘Just because he’s been appointed by someone else doesn’t mean we have an agenda to remove him. No government can dictate to the central bank. It’s an autonomous body and he holds a constitutional position. We don’t have any likes or dislikes,’ Goyal said in an interview and indicated that he approved of Rajan’s ‘harsh’ moves to contain inflation.

Goyal said in the interview that ‘the BJP had zero tolerance for inflation and would move to prevent hoarding of fresh produce, which has exacerbated food prices during supply shortages. It would seek a price stabilisation fund to support farmers during supply gluts and procure imports when there are shortages.’