Raghuram Rajan not fit to be RBI governor: Subramanian Swamy

Said move to increase the interest rates, so as to cut down inflation and stabilise the economy, has backfired and badly affected the nation

Bharatiya Janata Party leader Subramanian Swamy on Thursday suggested that Reserve Bank of India (RBI) Governor Raghuram Rajan be removed from the post as he was responsible for "unemployment and collapse" of industrial activity.

"In my opinion, RBI Governor is not appropriate for the country. I don't want to speak much about him. He has hiked interest rates in the garb of controlling inflation that has damaged the country," he told reporters in Parliament House.

The governor's actions have "led to collapse of industry and rise of unemployment in the economy", he said. "The sooner he is sent back to Chicago, the better it would be," he added.

Rajan is the on-leave Professor of Finance at the University of Chicago's Booth School of Business.

After assuming charge as RBI governor in September 2013, Rajan gradually raised the short-term lending rate from 7.25% to 8% and had retained the high rates throughout 2014.

He kept the rates high, citing inflationary concerns despite intense pressure from the Finance Ministry and the industry for softening them with a view to boosting growth.

The governor began the process of lowering the rates in January 2015 and since then it has come down by 1.50% to 6.50%.