Raghuram Rajan says all is well between him and BJP

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Raghuram Rajan says all is well between him and BJP
Washington, April 11: What is brewing between Raghuram Rajan, Reserve Bank of India Governor, and Narendra Modi, BJP's prime ministerial candidate?

There are media reports of tension between Rajan and the Narendra Modi-led BJP and some even speculate that BJP, if it comes to power, might even replace Rajan. However, on Thursday Rajan dismissed the reports and said everything is fine between him and BJP, said an NDTV report.

What triggered the rumours is his closeness to ministers in UPA cabinet.

Rajan, considered as one of brightest minds in the country, was appointed as Reserve Bank governor last year amid huge hype. Finance minister P Chidambaram is one of the ministers Rajan has been always in praise of.

"The success belongs entirely to the Finance Minister 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," he said on stage at a high-profile event at the Brookings Institute in Washington.

"I haven't had any discussion with the new government. I think this is all press invented differences and I think it should be seen as such speculation rather than any actual differences," Dr Rajan said.

BJP miffed with Rajan?

Many media reports suggest that BJP might look for a replacement for Rajan if they come to power at Centre post-polls. Accoring to a ET report, BJP treasurer Piyush Goyal attacked Rajan interest rate hikes. In order to curb inflation, Rajan has raised the repo policy rate three times by a total of 75 basis points to 8 percent.

"Governor Rajan is only aggravating the problems and making them worse by increasing interest rates," Goyal, a leading strategist and fundraiser for the BJP, told the Economic Times.

Subramanian Swamy, senior BJP leader, too has hinted that future looks gloomy for Rajan if the party comes to power "We can make it worthwhile for him to leave," Swamy told Reuters.

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