RBI governor's ranking must be raised, Raghuram Rajan urges Centre
The former central bank chief also emphasised on the need to maintain the institution's independence and sought a clarification on its role in certain areas.
Former Reserve Bank of India governor Raghuram Rajan has urged the government to raise the central bank chief's ranking to one that is comparable with the position. "There may be some virtue in explicitly setting the governor's rank commensurate with her position as the most important technocrat in charge of economic policy in the country...There is a reason why central bank governors sit at the table along with the finance ministers in G20 meetings," he said, according to Reuters.
While addressing students at a university in New Delhi, he also emphasised on the importance of maintaining the RBI's independence in its functioning. Rajan said there was a need to clarify the central bank's role in certain areas, such as whether it can raise its concerns with the government if it believes a measure it has taken can harm the country's economic stability. "...When should such warning be seen as interfering in the legitimate decisions of the elected representatives of the people?" he said, in his last public address.
The RBI governor's ranking – currently at a cabinet secretary level – is believed to have been a point of contention between Rajan and the Centre, which ultimately led to him announcing in June that he would not be seeking a second term. "I will, of course, always be available to serve my country when needed," he had said.
Rajan's term as RBI governor ended on Sunday, September 5, but the official ceremony during which the post will be handed over to his successor Urjit Patel will be held on Tuesday, September 7.