Modi Interview Suggests Rajan Would Have Gone Even Without Swamy’s Exertions

Would Raghuram Rajan have been retained as Reserve Bank Governor if Subramanian Swamy had not waded into the field with his own agenda? Reading between the lines of Prime Minister Narendra Modi’s interview to Times Now yesterday (27 June), the answer seems to be a clear no, though only the PM can officially confirm its veracity. Swamy’s unholy interventions were needless, and possibly queered the pitch for a government that may have already made up its mind to let Rajan go.

Consider his answers to Arnab Goswami’s questions. When asked about the Rajan affair, Modi replied circuitously that when the new government was formed, TV debates were organised around whether he would let Rajan go since he was a UPA appointee. Modi said: “There was more or less a consensus.....that Modi will remove him. (But) he worked his entire tenure. All misconceptions have been dispelled.”

The only misconception dispelled may be the presumption that Rajan should have been given a second two-year term. It is unlikely he would have got it. The only thing clear was that Modi did not want to rock the boat early and wanted Rajan’s exit to seem natural.

Then Modi said that “those creating controversies are being unjust to Rajan”. While this counts as a rap on Swamy’s knuckles, it could apply equally to those who were baying loudly for Rajan’s retention. Consider what he said in the next few sentences. “I believe Raghuram Rajan’s patriotism is no less than any of ours. It will be doing an injustice to him if one says he will serve the country only if he is at a particular post.” But this was the exact position of Rajan’s loud backers.

The second sentence is particularly telling. ‎Modi is indirectly saying that the RBI Governor’s post may not be the place for Rajan to prove his patriotism.
Then he lays it on thick with more double-edged Rajan praise. ‎”As far as I know Raghuram Rajan, whatever post he holds, wherever he is, he is someone who will continue to serve the country. He is someone who loves his country. Thereore, it is not like the nation won’t get Raghuram Rajan’s services. He is not that kind of person. He is a person who loves the country.”

Now, it is unlikely that Modi knows much about Rajan as a person or his patriotic motivations, for he could only have known Rajan the RBI Governor. He seems to have said all this to dispel the cloud of controversy created by Swamy which made it seem like Modi removed Rajan on the basis of Swamy’s pressure. On the contrary, Modi is effectively throwing a challenge to Rajan: now prove your patriotism by not talking too much about this once you go back to Chicago (or “wherever he is”).

Modi surely gave Swamy the thumbs down for “publicity stunts” but his statement after that may also apply to Rajan. “One should be more responsible while conducting oneself. Anyone who believes he is bigger than the system is wrong.”

Would this not apply equally to Rajan, whose supporters have been saying he is the next best thing to sliced bread, with one economic commentator even claiming that “billions of dollars” will flow out if Rajan is not given an extension?

You be the judge.