Soon after Modi-led government opened up foreign investments in civil aviation sector on Monday, questions started cropping up over whether the announcements on major FDI reforms had anything to do with the Raghuram Rajan’s exit from RBI or not?
Putting an end to all doubts and questions, Commerce and Industry Minister Sitharaman said, “We were working on these (FDI reforms) for couple of months. We have made the announcements after the work has been finished. Can it be done in one day,” told reporters.
At a media briefing, she was asked why the government chose to make the announcements today when there was a ‘hangover’ of Rajan’s decision to leave RBI.
Congress spokesman Jairam Ramesh described the decisions as a “panic reaction” which would not have come had Rajan not made the announcement. He also said the Congress does not believe that FDI is a magic wand.
Commenting on Rajan’s decision, Sitharaman earlier in the day said: “the government’s line is very nicely explained by the Finance Minister on this. We appreciate the work that the
RBI governor has done and he has taken a call to end his tenure and he is going back to academia and we respect that”
When pressed further on the issue, she said: “I am not adding to speculation at all. The government’s position is explained. He has taken a call, we respect his tenure and we respect his contribution”.
When asked why Rajan has been given “the shortest tenure”, the minister said during Rajiv Gandhi’s time, a” Governor was appointed and removed within 20 days”.A Ghosh remained RBI Governor for a very short period - from January 15, 1985 to February 4, 1985.