Is Subramanian Swamy still trying to corner Rajan?
The public tirade of Rajya Sabha member Subramanian Swamy against the outgoing governor of Reserve Bank of India (RBI) Raghuram Rajan is well known.
In a letter to the Prime Minister, Swamy had said, "He (Rajan) believes in raising interest rates to decrease inflation. This approach harms the small and medium industries (SMEs) a lot. These SMEs are the ones that generate jobs for the common man. Industrial growth is in negative because they (SMEs) are shut. This approach is like murdering someone suffering from fever, so that his body temperature drops."
It is only after Prime Minister Narendra Modi, in a television interview, spoke against such attacks did Swamy back down.
“Whether it is in my party or not, still I think such things are inappropriate. This fondness for publicity is never going to do any good to the nation. People should conduct themselves with utmost responsibility.
If anybody considers himself above the system, it is wrong,” PM Modi had said.
Swamy, in May this year, said that Rajan wasn't fully mentally Indian. He also said that Rajan's monetary policy had harmed small and medium enterprises in the country.
In Rajan's defence, he went on to say, "My experience with him has been good and I appreciate the work that he has done. He is no less patriotic. He loves India. Wherever he will work, he will work for India and he is patriotic.”
However, has Swamy really backed down?
Question number 1127 in the Rajya Sabha will tell you a different story.
Subramanian Swamy, posed three questions to the ministry of micro, small and medium enterprises inquiring about the health of MSMEs in India.
He asked, "(a) the rate of growth of output of Micro, Small and Medium Enterprises for the years 2013-14, 2014-15, 2015-16; (b) the number of such enterprises that closed down during these three years; and (c) whether the high interest rates were the cause of the performance of these industries?"
HP Chaudhary, Minister of State, micro, small and medium enterprises, in his reply, told the House, "Information on closure among MSMEs is collected through conduct of periodic Census of registered Sector. As per the last Census (Fourth) data collected with reference to the base year 2006-07, the number of closed MSMEs in Registered Sector is 4.96 lakh. Information on causes contributing to the performance of these MSMEs are not centrally maintained."
He also said, "As per the data compiled by Central Statistics Office (CSO), M/o Statistics and Programme Implementation (MOSPI), based on approximation, using the results of Annual Survey of Industries and surveys on unorganised sector, the rate of growth of output of Micro, Small and Medium Enterprises (MSMEs), at current prices, for the years 2013-14 and 2014-15 are 13.09% and 9.79% respectively."
The main reasons for the sickness of the MSME sector are inadequate and delayed credit, obsolete technology, marketing problems, infrastructural constraints, managerial deficiencies, Kalraj Mishra, Minister of MSMEs had said in a response to a question in the Lok Sabha on Monday.
While the data compiled by the RBI from the scheduled commercial banks showed that the number of sick MSMEs was 2.22 lakh by the end of March 2013, there was a huge jump to reach 4.68 lakh sick units by March 2014 and 4.74 lakh by March 2015.
But the reason, clearly, is not high interest rates.