Hope for strong successor to Rajan soon: Naushad Forbes

He said CII is confident that the government will appoint a strong successor to Rajan

Industry expects the government to soon name a strong successor to RBI Governor Raghuram Rajan, CII President Naushad Forbes said on Thursday while ruling out any serious impact on the economy and investor sentiment in view of his exit in September.

He also said that in order to build a dynamic and entrepreneurial economy, one should be welcoming of talent from all over the world.

CII is confident the government will appoint a strong successor to Rajan, he added.

When asked whether Rajan's decision not to seek another term would impact investment sentiments in India, he said economic opportunities drives investment sentiments and the India story for economic opportunity is very robust.

"I do not think, it will have any impact on investment sentiments. Investors are much more concerned about economic opportunity," Forbes told PTI in an interview.

"There will be no serious affect on Indian economy because one person, one man, however powerful, however influential, however great, cannot have an impact on an economy as big and complex as India," he said.

Forbes added: "We look for an early announcement because it will just remove one bit of doubt and uncertainty."

On June 18, buffeted by political attacks, including by BJP MP Subramanian Swamy, coupled with unending speculation over his continuance, Rajan had said no to a second term — a surprise decision the industry and opposition parties termed as a loss.

Replying to a question about political commentary on Rajan's exit, Forbes said: "We should not attack people personally. We should not make allegations about patriotism. All of this is unacceptable and I think the Prime Minister has made that amply clear... I think its just a standard behavior that we should all adhere to".

Ticking off Swamy, Prime Minister Narendra Modi has also disapproved of his attacks on Rajan calling them "inappropriate" and asserted the RBI Governor was "no less patriotic than us".

Meanwhile, earlier on Thursday, Rajan called on Finance Minister Arun Jaitley as the central bank and the government seek to quickly put in place a new interest rate-setting mechanism.

In sweeping changes, a broad-based 6-member panel — the Monetary Policy Committee (MPC) — is being set up to decide on lending rates instead of the present practice of RBI Governor taking a call in this regard.

Asked if the structure of the MPC would be put in place before the next policy review due on August 9, Rajan said: "I think we are putting out the structure. Let's see how far it goes."

Under the current system, the Governor has overriding powers to accept or reject the recommendation of the RBI panel on monetary policy.