New Delhi: RBI governor Raghuram Rajan on Wednesday described Prime Minister Narendra Modi as being “ahead of us” and said that his visits abroad need to be backed up with “action on the ground” in the country.
Dr Rajan said that the relationship between the RBI and the government has been strong, but added that he did not always agree with the finance minister’s point of view. “Otherwise, the public should start getting worried that the central bank is becoming too acquiescent. In a sense, we have to be a gatekeeper and sometimes say no!,” he told a news channel in an interview.
Dr Rajan said that Mr Modi foreign visits are “changing positively” the image of India. “What we need to do is back up his visits with action on the ground which reinforces the good impression that is created,” Dr Rajan said on Wednesday.
He said it is known abroad that “there are some issues that they have to deal with, but it should not be worse than their expectations.” “I think he (Modi) is ahead of us. So we have to come up to speed in a number of dimensions. For example, if the idea of India as a strong economy is sold outside and they come in, and they don’t find the ease of doing business, the permissions, etc. People aren’t (happy),” he said.
“So I think we need to steadily improve the reality on the ground; this attempt to improve the business environment which is proceeding on many fronts is I think a great step in the right direction,” he said.
RBI governor also indicated of further easing of interest rates if the economic data permits. “I don’t know if we have silenced critics (with the rate cut). I don’t think that was the aim. I really think what we were looking to was the state of the economy and to see what best we could do in terms of policy at the particular moment keeping in mind a longer term of objectives of keeping inflation under control,” he said.
