Here’s why Subramanian Swamy is wrong in criticising RBI Governor Raghuram Rajan

Subramaniam Swamy, BJP’s newly nominated member to the Rajya Sabha, recently said that Reserve Bank of India governor Raghuram Rajan should be removed from his post.

According to Swamy, Rajan has hiked interest rates “in the garb of controlling interest inflation”, which has “damaged the country”, and that he was responsible for “unemployment and collapse of industrial activity”.

Swamy, known for his outspokenness, is only partly right in his facts. Rajan did increase interest rates, but that was not only to control inflation, as Swamy has rightly pointed out, but also to save the rapidly sliding Indian currency.

ALSO READ: Raghuram Rajan not fit to be RBI governor: Subramanian Swamy

Rajan took oath as the RBI Governor in September 2013 at a time when rupee was around 70. Inflation since last quarter of calendar year 2012 was in double digit. Urgent measures were needed to bring down the inflation rate and stop foreign investors from leaving the country.

One way of doing that was to increase interest rates and offer better yield to foreigners which would tempt them to stay back and bring in more money in the country, which is what exactly happened. Outflow was not only stopped but nearly $10-15 billion of inflows was seen over the next few months.

Had he not done that, inflation would have skyrocketed and Indian economy would have taken the same route as global economy. Rajan not only managed to ring-fence the Indian economy from a global rout but also ensured monetary policy stability. In order to do so, he kept interest rates steady, though high, which is any case would not have affected Industrial activity since they were in dumps by the end of the UPA’s second term.

What Swamy seems to have missed out is that since January 2015 Rajan has reduced interest rate by 150 basis points, twice of what he had increased. Rajan joined office when interest rates were at 7.25 per cent, which Rajan progressively increased it to 8%, and retained it at the same level in 2014.

ALSO READ: Why Raghuram Rajan deserves a second term

But since January 2015, rates have been reduced from 8% to 6.5%. This was done only after the inflation rates started coming down from the double digit levels to below 6%. What is more credible is that inflation was kept lower despite two years of drought.

If there is anyone Swamy needs to criticise for non-activity in industries, it should be his colleague in the finance ministry. In order to take up the challenge of his predecessor of meeting the fiscal deficit target, the Finance Minister put a brake on government spending, which further slowed down a creaking economy.

Swamy also has missed out on the point that the role of a central banker is not only to play with interest rates but he has other mandates too. Commenting on Swamy’s statement V Kannan, former Chairman and Managing Director of Vijaya Bank pointed out that the RBI Governor had performed exceedingly well in three critical areas – containing inflation (a mandate given the central bank governor), ensuring orderly change in foreign exchange market and bringing credibility to the Indian banking system (through cleaning up of balance sheets).

Rajan’s carrot-and-stick policy is perhaps the main reason that the banking system has mustered enough courage to disclose their toxic assets they have been nurturing since the turn of the decade, again a legacy of the UPA era.

ALSO READ: RBI’s proposed norms likely to squeeze credit for high debt firms

Despite the fact that he will be in office for probably the next few months, Rajan has decided to take the bull by its horn by taking on the highly leveraged and politically connected industrial groups. Rajan will no doubt be feeling political pressure against some of the initiatives he has taken.

But credit has to be given where it is due. Rajan, as an economist and a government servant, has balanced his job very well. Swamy as a fellow economist should see through the political rhetoric and recognise the economist in himself.

Here’s why Subramanian Swamy is wrong in criticising RBI Governor Raghuram Rajan

SC upholds defamation law contested by Swamy, Kejriwal, Rahul Gandhi

The Supreme Court on Friday upheld the constitutional validity of India’s criminal defamation law that was contested by Congress vice president Rahul Gandhi, Delhi Chief Minister Arvind Kejriwal and BJP leader Subramanian Swamy.

The petitioners had argued that the criminal defamation law was in conflict with the freedom of speech and expression.

But the apex court did not agree.

The bench of Justice Dipak Misra and Justice Prafulla C. Pant, while upholding the relevant sections of the Criminal Procedure Code and Indian Penal Code, notably Section 499 of the former and Section 500 of the civil law, said defamation doesn’t have any “chilling effect on freedom of speech”.

“It is not necessary for all in the chorus to sing the same song,” Justice Misra said, pronouncing the judgment.

A magistrate should be extremely careful in issuing summons on a plea for the initiation of any criminal defamation case, he said.

The verdict was reserved on August 13 last year after the court heard the matter for over a month.

Section 499 deals with words spoken or written by someone with the intention to harm the reputation of another. Section 500 deals with the possible sentence for defamation, which may be a simple imprisonment for a term up to two years, a fine or both.

The verdict assumes significance in the light of a host of defamation cases in the political spectrum, especially the one filed against Chief Minister Kejriwal by Finance Minister Arun Jaitley.

SC upholds defamation law contested by Swamy, Kejriwal, Rahul Gandhi

Cabinet approves national IPR policy, gives innovation a push

The Cabinet has approved the national intellectual property rights (IPR) policy with a view to promoting creativity, innovation and entrepreneurship.

The aim is to create awareness about economic, social and cultural benefits of IPRs among all sections of society, Finance Minister Arun Jaitley on Friday said while briefing reporters about Thursday’s Cabinet decisions.

The minister also let out that by 2017, the window for trademark registration will be brought down to one month.

“The policy aims to create and exploit synergies between all forms of intellectual property (IP), statutes concerned and agencies,” he said.

According to Jaitley, there are seven objectives that guided the policy mechanism, which include IPR public awareness, stimulation of generation of IPRs, need for strong and effective laws and strengthening enforcement and adjudicatory mechanisms to combat infringements.

The policy also puts a premium on enhancing access to healthcare, food security and environmental protection.

It is expected to lay the future road map for intellectual property in India, besides putting in place an institutional mechanism for implementation, monitoring and review.

The idea is to incorporate global best practices in the Indian context and adapt to the same.

This IPR policy shall weave in strengths of the government, research and development organisations, educational institutions, corporate entities, including MSMEs, start-ups and other stakeholders towards creation of an innovation-conducive environment, an official statement read.

The end product stimulates creativity and innovation across sectors as also facilitates a stable, transparent and service-oriented IPR administration in the country, it stressed.

Giving due recognition to the growing criticality of IPR in the global arena, the blueprint makes out a case for increasing its awareness in India, whether it is owned by oneself or according respect to others.

“The importance of IPRs as a marketable financial asset and economic tool also needs to be recognised. For this, domestic IP filings as also commercialisation of patents granted need to increase. Innovation and sub-optimal spending on R&D too are issues to be addressed,” the statement said further.

Cabinet approves national IPR policy, gives innovation a push

Assam assembly polls: Badruddin Ajmal sees greater role for AIUDF at national level

AIUDF chief Badruddin Ajmal views a greater role for his party at the national stage after the Assam elections and plans to campaign in the Uttar Pradesh polls next year as part of a “grand alliance” with JD(U) and RJD.

“Bihar Chief Minister Nitish Kumar has already invited me to be a part of the grand alliance and I have responded positively,” he told said in an interview.

“Nitish Kumar has also asked me to join hands with them for the Uttar Pradesh assembly polls and I have consented to campaign in the state, particularly in the minority-dominated areas,” he said.

AIUDF will, however, chalk out its strategy for the national stage only after the results of the Assam assembly polls, the MP from Dhubri said.

AIUDF, the largest opposition party with 18 seats in the outgoing assembly, has already formed an alliance with JD(U) and RJD although these two parties do not have any significant presence in the state.

“We definitely have plans to play a constructive role at the national level but our party’s primary focus will be on the all-round development of Assam and people of all communities in the state,” the AIUDF chief said.

Assam’s problems remain a priority and “I have already raised the foreigners issue and the problem of flood and erosion in the ongoing session of Parliament”, he said.

“I will soon meet Union Water Resources Minister Uma Bharti to discuss on the issue of floods in the state. The Brahmaputra has to be controlled and we will continue our pressure on the Centre to declare floods a national calamity,” he said.

“Unless floods are declared a national calamity, sufficient funds will not be sanctioned to tackle the issue and the problem will continue to persist and haunt us,” Ajmal said.

The Congress government in Assam has done nothing to solve this issue and unless the problem of flood is solved there can be no development, the AIUDF chief claimed.

“I have also taken the initiative for the bridge from Dhubri in Assam to Phulbari in Meghalaya and Union Transport Minister Nitin Gadkari has already announced that it will be constructed and this is going to be a mega-project,” he added.

Asked about allegations that he is in politics to protect his business interests in the state, the perfume baron said of his entire family business “only 1% is in Assam while 5% in other parts of the country and the remaining 95% at the international level”.

“How can my business gain by my being in politics in the state. This is a false propaganda by Congress and in fact they have tried to harm my business on many occasions. I am in politics for the people of Assam and have for years played the role of a responsible opposition party in the state,” he said.

Asked about allegations by the sole woman MLA (Gul Akhtara Begum from Bilasipara-East) of the party in the outgoing assembly that AIUDF was not a women-friendly party, he said she was claiming that now as she was denied ticket for the assembly polls.

“I brought her into politics… From being a housewife, she became a MLA. I did assure her that she will get the ticket for the next Parliamentary polls but she went ahead and joined Congress. We give tickets to deserving candidates and many women are contesting the assembly polls this time from our party,” he added.

Asked about Opposition attacking AIUDF as a family centric party, he said besides him it was only his brother and one of his sons who are in politics.

“There are so many members in our family and in our next generation, there are at least 25 members and only one is in politics. Members of my family are free to practice whatever profession they wish,” he added.

Assam assembly polls: Badruddin Ajmal sees greater role for AIUDF at national level

Kerala assembly polls: CPI(M) assails PM Modi for his Somalia remarks

Hitting out at Prime Minister Narendra Modi for his Kerala-Somalia comparison, the CPI-M here today said situation in the state did not become like the African country because BJP never came to power here.

“Modi’s statement would result in a setback to BJP in the ensuing polls as it has insulted the people of the state,” CPI-M state Secretary Kodiyeri Balakrishnan said.

Referring to Modi’s Somalia remarks, Balakrishnan said “one thing the Prime Minister should understand is that the state has no such situation as in Somalia because, BJP has never come to power”.

He said “Gujarat Model” development projected by the BJP was actually a false propaganda.

Kerala assembly polls 2016

“It was the first communist government formed in 1957 that laid the foundation for the development path of the state with its policy on land reforms, education, health and also in other sectors,” Balakrishnan said.

Taking a swipe at Modi, the CPI-M leader said whichever states that went to polls where Modi led the campaign as Prime Minister, BJP suffered defeat.

“In Kerala also, the same thing is going to happen. BJP is not going to open an account in the state this time also”, he said.

Assailing the Congress-led UDF, he said political climate in the state was in favour of LDF and the “Front will come to power with more than 98 seats which it got in 2006 Assembly polls”.

He alleged that it was the soft stand taken by Chief Minister Oommen Chandy that paved way for the growth of “Hindutva force” in the state.

Balakrishnan said UDF government had withdrawn cases against Hindutva leaders including VHP leader Praveen Togadia.

This government has refused to file any case against the VHP workers when ‘ghar wapsi’ was organised in the state, he pointed out.

Referring to Modi’s remark that CPI(M) encouraged violence, Balakrishnan said 221 CPI(M) workers had been killed by BJP activists since 1970. After the UDF government came to power in 2011, 28 CPI(M) workers were killed.

The LDF would decide on its leader (Chief Minister) after the results are out, he said.

Kerala assembly polls: CPI(M) assails PM Modi for his Somalia remarks