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Top Industry Body Backs Second Term For Rajan

Naushad Forbes, president of the Confederation of Indian Industry, says personal attacks on the RBI chief are unwarranted

Photo Credit : Umesh Goswami

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As Raghuram Rajan continues facing heat from some sections of BJP, leading industry body CII on Thursday backed a second term for RBI Governor, saying he has done a great job for the country and personal attacks on him are "demeaning".

Naushad Forbes, president of the Confederation of Indian Industry (CII), echoed Finance Minister Arun Jaitley's stand that personal attacks are unwarranted.

"I would only repeat what Finance Minister has said that I don't think personal attacks are warranted. I don't think they serve us well at all as a country. They in a sense actually are demeaning. So I agree with him 100 per cent," he told PTI in Osaka.

Forbes, who is part of a high-level industry delegation accompanying Jaitley on the six-day visit to Japan to drum up investments, said he did not take continuous attack by BJP MP Subramanian Swamy on Rajan seriously and treats his comments as noise that are part of a vibrant democracy.

"I think the Governor has been doing a great job for the country and we would certainly see it as a very positive move if he were reappointed," he said.

Rajan, who was appointed by the previous UPA government for a three-year term that began on September 4, 2013, has been under attack from some quarters in BJP, including its Rajya Sabha MP Subramanian Swamy, for what they term as his failure to lower interest rates and boost economic growth.

"I am sure the government will take up the issue (of Rajan's reappointment) at the appropriate time," Forbes said.

Asked about Swamy's comments on Rajan, he said, "I don't take them seriously. I treat those comments as noise as part of our noisy democracy. It is a sign of vibrancy."

Jaitley too in an interview to PTI earlier had denounced the attack on Rajan saying the debate should be about the issues and policies, and not about personalities.

"I do not approve of any of these comments being made by anyone as far as the personality is concerned, because the RBI and its Governor is an important institution in the Indian economy," he said.

The Finance Minister further said, "People should be open to discussing all issues and policies, they have a right to support those policies, they have a right to criticise those policies. But this can't be converted into comments on personalities because that blurs the issue."

A former chief economist of the International Monetary Fund (IMF), Rajan is currently on leave from the Chicago Booth School of Business, where he holds the post of Distinguished Service Professor of Finance.

If denied an extension, he will be the first RBI Governor since 1992 to not have a five-year term.

His predecessors D Subbarao (2008-2013), Y V Reddy (2003-2008), Bimal Jalan (1997-2003) and C Rangarajan (1992-1997) had five-year terms.

Rajan, who after taking over raised the short-term lending rate from 7.25 per cent to 8 per cent and retained the high rates throughout 2014, began the process of lowering the rates in January 2015. He has since then cut them 1.50 per cent to 6.50 per cent.