As the Modi government continues to come under fire for RBI Governor Raghuram Rajan’s exit, several theories are doing the rounds as to what led to his decision to not seek another term.
Ravish Tiwari reports in ET that it was due to RSS ideologue S Gurumurthy’s backing of Subramaniam Swamy’s attack that the BJP could not speak its mind on the issue. ET reports:
“The objections flagged by Subramanian Swamy and S Gurumurthy, the two voices who have the ears of RSS headquarters in Nagpur, made it difficult for the BJP to manoeuvre much. Though Swamy fired the shots, these gained credibility when Gurumurthy lent support. "Endorse Dr Swamy. Nothing personal against Rajan. Only point is he knows very little re India. He's a Global Indian (sic)," Gurumurthy tweeted on May 27.
The endorsement by Gurumurthy, who is held in high esteem in the saff ron ranks, made it difficult for the BJP to speak out of turn on this issue. In fact, BJP president Amit Shah avoided delving into this matter lest he falls foul of Nagpur. "The BJP does not need to give its opinion on this," said Shah in May regarding Swamy's tirade against Rajan.”
Meanwhile, Vasudha Venugopal reports in ET that meeting of top Sangh Parivar leaders with government officials were “important inputs for the government as it was applying its mind on the issue of RBI governorship”.
ET says,
“Long-time Sangh ideologue S Gurumurthy were among those who participated in those deliberations. He is believed to have met top government officials. “
“Both Sangh ideologues and some private finance figures had given the input that Rajan's intellectual view of the Indian economy was not, as they saw it, entirely correct. “
“This argument said that as an economy with capital controls, non-convertible currency, strong bank deposit protection rules and, until recently, no bankruptcy laws, India needed a more nuanced approach than Rajan's to several issues. The governor was applying American financial system wisdom to India, this argument.”“Some people involved in these deliberations also argued that Rajan's handling of non-performing assets of banks did not entirely meet the test of pragmatic policymaking.”
This is entirely in line with Chartered Accountant MR Venkatesh’s interview to The News Minute. Known to be working in close proximity to Swamy and Gurumurthy, Venkatesh also raised concerns on Rajan’s handling of the NPAs and his economic smartness not being ‘Indian’ enough.
However, Gurumurthy has flatly denied he had any role in Rajan’s exit.
Surprised to know I am held in such high esteem and my views caused Rajan’s exit. Shockingly false report https://t.co/kYLsYnPKV4
— S Gurumurthy (@sgurumurthy) June 20, 2016
Held & expressed the view RR Rajan's thinking did not fit Indias needs & he should not be repeated. But ET says that sealed Rajan. Too much
— S Gurumurthy (@sgurumurthy) June 20, 2016