Raghuram Rajan not Prime Minister of India, partly responsible for his exit: Yashwant Sinha

The former Finance Minister of India Yashwant Sinha, in an interview to business news channel ET Now, said the hype created around Raghuram Rajan’s exit resulting in a financial doom was totally uncalled for.

Sinha stressed that a big country like India cannot be dependent just on one individual and held Rajan’s statements partly responsible for the controversy, which was created around his exit.

“He is not the Prime Minister of India; he is not even the Finance Minister of India. He has a role which is well defined in our system and he has to perform that role. Most governors have performed that role very ably and there has been no problem,” Sinha said.

Sinha credited the Narendra Modi-led government to have openly shown support to Rajan against personal attacks made by BJP member Subramaniam Swamy.

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Sinha said targeting wholesale price index to combat inflation is a better method compared to food inflation targeting. He called a tight monetary policy stance negative for investments and food prices.

“Tight monetary policy will achieve nothing with negative WPI,” Sinha said.

“There are only two things you can do in monetary policy - one is raising interest rates or go for liquidity squeeze - both hurt. They do not hurt the person who is buying food but hurt those who want to make investment,” Sinha said.