Swamy Vs Jaitley: Raghuram Rajan in a Hard Place

NEW DELHI: Finance Minister Arun Jaitley has been critical in the past of Reserve Bank of India Governor Raghuram Rajan known for his direct and straight speech. That the two are now on the same page seems to be largely because of the attack on Rajan by Rajya Sabha MP Subramanian Swamy with the conspiracy theorists in the BJP as well, attributing this to the latter’s long known rivalry with Jaitley.

Visibly on edge while contradicting Rajan’s critique of the economy in the past, Jailey who does not like to wash dirty linen in public with the same frequency as his BJP rival, has come out in support of Rajan during his visit to Tokyo. In a clear response to Swamy’s two letters to Prime Minister Narendra Modi against Rajan where he has used non-civil adjectives as well, Jaitley said that the debate should be on issues and policies and not about personalities.

The Finance Minister did not say whether Rajan will get an extension after his term ends in September, a question he has been consistently avoiding for a while now. Although he says that this is not something that he will disclose to the media, sources pointed out that the decision will be taken by Prime MInister Narendra Modi. And the very fact that Swamy has been ‘allowed’ to write not one but two letters against the RBI Governor is an indication that he will not get a second term in office.

Interestingly, despite the not very close relations between Jaitley and Rajan, the buzz around Swamy’s targeted attack, in the corridors of power has been that he is actually firing at Jaitley from the RBI Governor’s shoulder. And that bringing Rajan in the line of fire, is basically to fire at the Finance Minister to ensure that he is moved to another Ministry in the impending Cabinet reshuffle.

Swamy has asked the Prime Minister to terminate Rajan’s services, or to at least not give him another term in office. Jaitley was thus compelled to defend the RBI Governor to the Press Trust of India with, "I do not approve of any of these comments being made by anyone as far as the personality is concerned, because the RBI and its Governor is an important institution in Indian economy,"

, "People should be open to discussing all issues and policies, they have a right to support those policies, they have a right to criticise those policies. But this can't be converted into comments on personalities because that blurs the issue." he said.

In his second letter to the PM published in a section of the media four days ago, Swamy has added concerns of national security to his litany of complaints against Rajan for financial mismanagement. He has also expressed concern about the RBI Governor’s comments about intolerance. This is his second letter to PM Modi against Rajan in a fortnight.

Jaitley who has crossed words with Rajan on issues earlier now feels compelled to defend the RBI Governor pointing out that “RBI is an important institution and one can agree or disagree with its judgement” but that it should not be turned into an attack on individuals.

Rajan was appointed by the UPA government, and has rung several warning bells about the impact of social unrest on economy. In April while speaking in Pune he earned the ire of Swamy and others in government with, “Gandhiji used to say “An eye for an eye will only make the whole world go blind”. Clearly, what is implied is that the whole world going blind is not a desirable state of affairs. One might take umbrage since it suggests blindness is an inferior state to that of being able to see, and the saying could be seen as discriminatory. Yet Gandhiji’s focus was on the absurdity of a policy of revenge, not on blindness, and his intent was not to disparage the blind………..For instance, “An eye for an eye will only make the world go blind” could be replaced by “Revenge reduces collective welfare”. The latter is short, inoffensive, and pithy, but meaningless for most listeners.”

Swamy’s missives are not seen as independent of PM Modi just as his inclusion in the Rajya Sabha after two years is interpreted politically as a move to curb Jaitley. Swamy has made no secret of his dislike for the Finance Minister in the past and is expected to increase the decibels with time. Jaitley, while the troubleshooter for PM Modi in Parliament and often with the regional parties outside as well, does not enjoy the confidence of the BJP/RSS top brass with many said to be concerned about his phenomenal rise in government. This, as sources pointed out, has to do more with the fact that Jaitley has a better grasp than most---if not all---in the government about Parliamentary rules and norms, and is an easy and articulate orator. He is fairly popular with the media, a relationship that he uses well and with more expertise than others in government.

Swamy is articulate too but does not have good relations with the media, and often laces his knowledge about the law with wild allegations that make him not as credible as Jaitley insofar as the media is concerned. However, he has been persistent in targeting individuals with his special list including Congress president Sonia Gandhi, Tamil Nadu chief minister Jayalalithaa and of course Jaitley who is feeling the pressure, and the need to respond as his comments in Tokyo indicate.