Modi ally happy to see central banker go

India will have a more pro-growth atmosphere now, says Mr Subramanian Swamy (left), dismissing concerns from those who fear that central bank governor Raghuram Rajan's exit is bad for the country.
India will have a more pro-growth atmosphere now, says Mr Subramanian Swamy (above), dismissing concerns from those who fear that central bank governor Raghuram Rajan's exit is bad for the country.PHOTO: REUTERS

NEW DELHI • The Indian ruling party lawmaker and prime minister's ally who pushed for the departure of central bank governor Raghuram Rajan hailed his impending exit yesterday, saying his nation's growth could now head towards 10 per cent.

Prime Minister Narendra Modi will be "unfettered" and "start moving in a big way" with Mr Rajan out of the picture, said Mr Subramanian Swamy yesterday.

A nationalist named to the Upper House of Parliament in April by the ruling Bharatiya Janata Party, Mr Swamy - a Harvard-educated economist - has a track record of criticising Mr Rajan. He has risen to international prominence with the shock retreat of the Reserve Bank of India chief .

Even before Mr Modi swept to power in 2014, Mr Swamy was agitating for Mr Rajan's removal. And less than a month after gaining his berth in Parliament, Mr Swamy wrote an open letter to Mr Modi that questioned Mr Rajan's loyalty to India as he holds an American green card.

He accused the governor of an "apparently deliberate attempt" to "wreck the Indian economy".

It was "in the national interest" to fire Mr Rajan, Mr Swamy wrote.

Yesterday, he accused Mr Rajan of holding back the economy, saying: "It was almost as if he was inspired to prevent the growth story from taking off."

"It will be a more pro-growth atmosphere now," Mr Swamy said by phone. "You won't have to hear all these outdated theories about controlling inflation by raising interest rates."

With Mr Rajan's exit, India can expect large public works programmes such as road-building, investments in desalination of sea water and asset-creating spending that is not inflationary, Mr Swamy said. He dismissed concerns from those saying the governor's exit is bad for India. "Let them wail," he said.

As for Mr Rajan's successor, he called for someone with no ties to Mrs Sonia Gandhi, president of the opposition Congress party.

He also chided those who predicted Mr Rajan would get a second term despite his campaign. "You people said I don't count for anything and Rajan will be given a second term and the prime minister likes him very much and the finance minister is in love with him," Mr Swamy said. "What happened in the end? You looked all silly."

BLOOMBERG, REUTERS

A version of this article appeared in the print edition of The Straits Times on June 22, 2016, with the headline 'Modi ally happy to see central banker go'. Print Edition | Subscribe