Jaitley vs Rajan

July 12 2015

It was not a sudden warning from RBI Governor Raghuram Rajan that India might see an economic slump. Sources say he did it to put pressure on the Modi government because his tenure is about to get over, and Finance Minister Arun Jaitley is not in favour of his getting an extension because both Rajan and he have different takes on India’s economic reforms. Jaitley wanted bank interest rates to come down further, while Rajan is worried about currency inflation. Jaitley thinks hiring an agency to recover NPAs might be a good idea, while Rajan thinks differently. Jaitley’s suggestion is to go for growth that also makes Modi government’s agenda a part of it, but it is being said that Rajan is not agreeable to the idea. Thus, Modi government is looking for a different RBI governor instead of Rajan.

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