The Telegraph
Monday , June 2 , 2014
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Rajan, PM meet before review

Prime Minister Narendra Modi with RBI governor Raghuram Rajan in New Delhi on Sunday. (PTI)

New Delhi, June 1: Reserve Bank governor Raghuram Rajan today met Prime Minister Narendra Modi and is likely to have discussed the macro-economic situation and issues related to price rise.

The meeting comes two days before the RBI bi-monthly monetary policy review.

“The governor of the Reserve Bank of India, Raghuram Rajan, called on Prime Minister Narendra Modi at 7, Race Course Road today. It was a courtesy call,” a brief official statement said.

The meeting was the first since Modi assumed office on May 26 and comes amid speculations on whether the central bank will persist with its hawkish anti-inflation stance or accommodate the new government’s pro-growth policies.

Last week, Rajan also met finance minister Arun Jaitley and had said fighting price rise was a priority, stressing that the apex bank has always maintained a balance between the need to check inflation and prop up growth.

The latest data show that the economy grew just 4.7 per cent in 2013-14, the second straight year of sub-five per cent growth. Growth remained subdued at 4.6 per cent in the fourth quarter.

Known for the primacy he accords to controlling inflation, Rajan on Friday said the “government and the central bank have both stressed the need to bring down inflation, while respecting the fact that growth is very weak”.

Earlier, talking to reporters after meeting Jaitley, Rajan had said, “The RBI has always maintained the balance between growth and inflation.”

Since taking over as the RBI governor in September last year, Rajan, has hiked interest rates three times.