Raghuram Rajan Meets PM, FM Amid Speculation Over Second Term

26/05/2016 12:10 PM IST | Updated 15/07/2016 8:27 AM IST
Reserve Bank of India Governor Raghuram Rajan takes a question from a journalist during a press conference in Mumbai, India, Tuesday, Aug. 5, 2014. India's central bank says it sees signs of recovery in Asia's third-largest economy even though the monsoon season, which is crucial for agriculture, had a weak start. (AP Photo/Rajanish Kakade)

Reserve Bank Governor Raghuram Rajan reportedly met Prime Minister Narendra Modi on Wednesday evening, as he awaits the decision on his reappointment for a second term, according to NDTV.

Rajan’s role as India’s central banker has been subject of much controversy and intense lobbying in favour and against the extension of his term that expires in September following scathing remarks from BJP Leader Subramanian Swamy over his performance. That was despite Rajan’s well-regarded international reputation as a tough economist and his tenure as the former chief economist of the International Monetary Fund (IMF). Rajan had also successfully predicted the 2008 US recession.

Rajan appears to have also met Finance Minister Arun Jaitley earlier on Wednesday, reportedly to discuss the macroeconomic situation, according to media reports. It was unclear if the extension of his tenure was discussed during that meeting.

Meanwhile, BJP chief Amit Shah on Wednesday reminded journalists that the party's official stand on the matter rests with him, seemingly distancing himself from Swamy’s comments.

"The party stand is spelt out by me," Shah was quoted as saying.

Rajan has received overwhelming support from leaders of Indian corporations including many entrepreneurs, who have urged the Centre to grant him an extended term.

Bajaj Group Chairman Rahul Bajaj told the Business Standard, "I believe Rajan should get an extension for more reasons than one," said Rahul Bajaj, chairman, Bajaj group. Bajaj added, "During the last few years, he has been the best Reserve Bank governor. I have agreed with his interest rate policy to control inflation even though many of my industry colleagues had a different view."

Marico Chairman Harsh Mariwala warned against bringing on a new central banker in the interest of stability, “Rajan is going about finishing his unfinished agenda. At this stage, to change to someone else would mean shifting gears. It is better Rajan completes his journey over the next term.”

Even Amul Butter, in its usual iconic style recently lent support to Rajan with a cartoon cleverly captioned “Raghuramain,” cheering on Rajan.

Adi Godrej, chairman, Godrej Group, has also praised Rajan for his performance, saying, “[Rajan] is very well respected across the world. He is a very capable person and I think if his term is extended then it's a good thing for India."

Earlier this month, Swamy had launched a scathing attack on Rajan, asking for his immediate sacking and alleging mismanagement of the country’s monetary policy. Swamy particularly questioned Rajan’s stance on interest rates and his loyalty to the country, saying he was mentally not “fully Indian” as he had held onto his US Green card.

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