All my controversial speeches are perfectly legitimate, says Raghuram Rajan

Mumbai: Outgoing RBI Governor Raghuram Rajan today strongly defended his controversial public speeches as “perfectly legitimate” ones within the remit of a central bank head and asserted that he was never critical of the government in any instance. “These are perfectly legitimate speeches. You can interpret them any which ways you want,” Rajan said at an interaction with select news agencies on Tuesday evening. “In none of those speeches that I have made has there been an explicit criticism or an implicit criticism of the government. There are people who read the interpretation of what is the speech I have given,” he added. [caption id=“attachment_2846996” align=“alignleft” width=“380”]  RBI Governor Raghuram Rajan. PTI[/caption] After his decision to return back to academia, there have been voices suggesting that his candid public speeches were one of the aspects which made the government uncomfortable about reappointing Rajan for another term. The academic-turned-central banker spoke a lot across the country and abroad in the three years at helm, and had a special liking for educational institutes. Some of the controversial speeches made by him include the one where he quoted American political philosopher Francis Fukuyama to question whether strong governments can really help a country or in defense of tolerance in the middle of a debate started by the killing of a Muslim man over suspicion of storing beef, or questioning the premise of the high-octane ‘Make in India’ campaign. Rajan, who refused to accept a second term at helm of the Reserve Bank, today sought to defend his stance in all these instances and stressed that he was within his remit as the central bank governor while making those remarks. “Some of those speeches have been on economic issues but outside the monetary policy. But those economic issues are perfectly within the remit of the central bank because ultimately we have a remit of macrostability,” he said. Rajan also said his concerns on the Make in India campaign – wherein he had pitched for ‘Make For India’ given the fragile economic conditions the world-over – have come true. “There was lots of criticism like you are being defeatist etc. Passage of time suggests that advice to look internally for demand at least for the short to medium term even while strengthening our manufacturing and service sector productive capabilities, which I thought was the central point of making in India, was extremely important,” Rajan, who will go back to the Chicago University, said. In case of the post-Dadri speech at his alma mater IIT-Delhi, Rajan reiterated the need to be open for ideas as a service-sector driven economy. “That speech was about the fact that in order to grow as a country which is largely a service economy, we have to be open to ideas. Once you reach the frontier, the only way you can grow is by ideas. And in order to get those ideas, you have to have tolerance for unorthodox ideas because those unorthodox ideas is how we move forward,” he said. “As a society which is developing, which in some places is near the frontier, we have to have an open dialogue,” Rajan added. “I haven’t in a sense talked about (things like) dance and music. That would be exceeding my remit,” he quipped. Asserting that none of his speeches has caused any market fluctuations, the central banker also conceded that every speech cannot be on the monetary policy. “Every speech if I give on monetary policy, I will commit a gaffe sooner or later. None of the speeches has moved the markets, which is an important criteria for a central banker,” he said, adding markets have to be moved with policy announcements and not off-the-cuff remarks. “As a central banker, whatever you say has to be calculated,” he said, adding at times when the market requires clarity like the post-Brexit vote, the central bank head has to be reassuring, which he did. In context of the Make in India speech, Rajan said, “We need growth at a measured pace” which is consistent with what the economy can support and depend on fundamental reforms to fasten the process. I still maintain that the world doesn’t look different than it looked three four years ago. So the focus should be on having a platform of economic stability. Only then can we have sustainable domestic demand," he said. Noting that every economic problem stems from people looking for magic bullets which have no pain, Rajan said most our problems are orthodox, which need orthodox solutions.“When the problem is orthodox, its reasonable that their solutions are also orthodox.” He concluded by stating that “we need to have a measured pace of growth consistent with what the economy can support in a sustainable as the real oomph to growth will come from domestic reform like GST and the Bankruptcy Code. This will help elevate the growth rate.”