I decide monetary policy, govt can fire me if it wanted: Rajan
May 09, 2014 23:08
Asserting independence of the central bank, Reserve Bank Governor Raghuram Rajan today said it is he who determines the monetary policy and the government can fire him if it wanted.
"I determine the monetary policy. I say what it is. The government can fire me, but the government doesn't set the monetary policy. So, in that sense, am I independent! Well, I am happy to talk to the government. I am happy to listen to the government but ultimately the interest rate that is set is set by me," he said at St Gallen Symposium in Switzerland.
Rajan was replying to a question on how much independence and real power he enjoyed as RBI Governor during a programme
that was broadcast on Bloomberg TV.
The central bank, he said, works with the Finance Ministry and he has regular conversations with the Finance Minister.
"We (RBI) control the monetary policy. In India, what happens is when we want to do something big, we go, tell the government this is what we want to do and the government is usually supportive.... We talk to each other," he said.
Replying to questions on growth, Rajan exuded the confidence that India would revert to 7-8 per cent growth rate with right kind of policies. However, he added, achieving higher growth would be difficult.
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