PM Modi and 'Raghuram ji' are on same wavelength

In an attempt to play down differences between the government and the Reserve Bank of India (RBI) , Prime Minister (PM) Narendra Modi said on Thursday that there is similarity in thinking on both sides on financial issues.

At a function held in the national capital to mark 80 years of RBI, Modi expressed satisfaction over the role played by the Central bank under Raghuram Rajan and said that "there is lot of similarity between the thinking of the RBI and the government".

There have differences between the RBI and the government on a range of issues, including inflation and interest rates. While the finance ministry is keen that the RBI cut interest rates to spur growth and employment, the Central bank has been sticking to a tight monetary policy with its higher priority to control inflation.

Recalling his bi-monthly meetings with Rajan, Modi said that he is the perfect in explaining the implications of policies and would do so in just three or four slides. Modi added that he himself is not adept at understanding economic issues, but as the PM he had to learn and understand complex issues.

Rajan in his address said that "history records that successive governments have invariably appreciated the wisdom of the Reserve Bank's counsel". Underscoring the need to nurture strong institutions like the RBI, he said, "Strong national institutions are hard to build. Therefore, existing ones should be nurtured from the outside and constantly rejuvenated from the inside for there are precious few of them."

At the same function, Jaitley also congratulated Rajan, his team and past RBI governors for their contribution in making the economy resilient. Jaitley also lauded RBI's efforts in improving macroeconomic conditions in the last eight decades.

"It is the professionalism and ability of the Central bank which has indeed served the country well", he added.