In an exclusive interview with Times Now, Finance Minister Arun Jaitley says a difference in perspective does not mean an institutional failure. In a democracy, everybody need not agree at the same time on complex issues.
Edited excerpts:
On RBI vs Govt controversy
I do not believe that the central bank and the finance ministry can agree on every issue. They need not disagree on every issue. But by a process of consultation and discussion at various levels, whatever we have done is to ensure that consultations take place. Let me put the record straight. Consultations have taken place at the level of the prime minister on several occasions. They have taken place at my level on innumerable occasions. They take place at the level of the secretaries on several occasions.
Let me just define the elements – there are some issues which are completely in the domain of the government; some issues are completely in the domain of the central bank. There is no dispute. Ultimately after consultation, you exercise your respective functions. In some areas, the policy is laid down by the government. Certain measures have to be taken by the central bank. There has to be a coordination between the two. Therefore, a difference in perspective does not mean that it is an institutional failure. In a democracy on complex issues, everybody need not agree at the same time.
On Raghuram Rajan who was picked by the UPA government
Arun Jaitley: Not in the least. I have maintained utmost courtesies with the institution as also with the individuals who have manned these institution.
But he resigned.
Arun Jaitley: You are again factually wrong. He had a three-year term. He completed his three-year term. Your colleagues in the media made it out as though he has resigned. He did not resign. He completed his three-year term.
On Urjit Patel, a man NDA government selected.
You may not be on the same page with your co-anchors or colleagues on but that does not mean the institution has collapsed. In democracy, you are meant to disagree on several issues. Otherwise, it will become meaningless.
Now the governments view point is — we respect and we will always maintain the autonomy within the framework of the laws which have been laid down. At the same time, if there are sectors of the economy which are starved of either liquidity or credit, as a sovereign government which represents the people and which has the larger interest of the economy in mind, we certainly will flag those issues.
The common man feels the government wants RBIs Rs 3.6 lakh crore reserves for financing the election year expenditure.
Who has said this? It can be said only by those who took Indias fiscal deficit to 6% when they had the responsibility. We have nothing of this sort in mind. Let us first tell your so-called common man as to what fiscal deficit is. How much does the government collect and how much does the government spend. If you spend beyond your earnings, that is your fiscal deficit because you are borrowing from the markets. You are then going to leave your next generation in debt. During the UPA, it went haywire and went as high as 6%. We inherited a 4.6% fiscal deficit. This government since 1947 in its five-year tenure has the best record of fiscal prudence that any government has had.
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