Govt shares healthy relationship with RBI, says Jaitley

With the RBI holding interest rates despite persistent clamours for a cut, Finance Minister Arun Jaitley today said the government shares a "healthy" relationship with the central bank.
"Government and the Reserve Bank have a very healthy relationship. Apart from healthy relationship, you can always afford a healthy debate in a democratic society," the Minister said while talking to NDTV.
RBI Governor Raghuram Rajan, who has kept interest rates unchanged since January, has said that job of the regulator is not to boost Sensex. He has also maintained that rate cut by itself will not boost economic growth.
Observing that the balance between inflation and growth has to be maintained, Jaitley said: "The Reserve Bank is a very experienced and professional institution. Its fully conscious of its responsibility".

Earlier in the day, Rajan in a lecture said: "The role of regulators is not to boost the Sensex but to ensure that the underlying fundamentals of the economy and its financial system are sound enough for sustainable growth. Any positive consequences to the Sensex are welcome but are only a collateral benefit, not the objective".
The RBI Governor had yesterday stressed that interest rate cut by itself would not lift the economy. "It is not the only thing which is holding back economic growth. But it would have some impact," Rajan said.

Responding to Rajan's caution with regard to the 'Make In India' campaign, Jaitley said "I do not find anything improper or incorrect in the statement because India is a very large market and therefore most of what we make is to be domestically consumed.

"... And certainly export also is a very important market for us. To be competitive in the market, we not only have to make in India, but also have to make it cheap".
Rajan had said: "I am...Cautioning against picking a particular sector such as manufacturing for encouragement, simply because it has worked well for China. India is different, and developing at a different time, and we should be agnostic about what will work".
According to Rajan, instead of a following the export-led growth path of China, the country should focus on 'Make for India'.