Rajan’s comments on economy draw flak

Indian central bank Governor Raghuram Rajan clarified a remark that drew criticism from several government officials as uncertainty remains over whether his three-year term will be extended beyond August.

While speaking with a reporter in the US last week, Rajan used a proverb to characterise India’s relatively faster growth in a weak global economy, saying: “In the land of the blind, the one-eyed man is king.”

The remark drew rebukes from members of Prime Minister Narendra Modi’s government. Junior Finance Minister Jayant Sinha said he disagreed with the comment and called India a “shining star”.

Commerce Minister Nirmala Sitharaman said Rajan should have chosen his words more carefully.

“My intent was to signal that our outperformance was accentuated because world growth was weak, but we in India were still hungry for more growth,” Rajan told graduating students in the city of Pune yesterday.

He said that “few read beyond the headline” and the implication took hold “that I was denigrating our success rather than emphasising the need to do more”.

Rajan called for more efforts toward improving public dialogue, urging speakers to avoid being gratuitously offensive while cautioning listeners to include context and “not to look for insults everywhere”.

He also offered an apology to the blind, saying that he was “sorry for implying the blind were otherwise than capable”.

Rajan’s relations with Modi’s government are under scrutiny amid speculation on whether he’ll get an extension. Since taking charge of the central bank in 2013, Rajan has led the push for an inflation target, a monetary policy committee and moves to clean up the balance sheets of state-run banks.