PM Narendra Modi calls RBI chief Rajan perfect

Stating that Rajan would explain implications of RBI's policies in "just three-four slides", Modi also said that he must have been a very good 'teacher' in the past.

Rajan, who has been Professor of Finance at University of Chicago and joined RBI as its Governor in September 2013, said on his part that there has always been a "constructive dialogue" between RBI and the government.

There have been talks from time to time about differences between the central bank and the government on a range of issues including on inflation and interest rates.

While the government and RBI have always maintained that there were 'no differences' between them, some proposals in this year's Budget indicated shifting certain functions out of the central bank's ambit including on the public debt management.

Speaking at a function to mark 80 years of the Reserve Bank of India (RBI), Modi expressed satisfaction over the role played by the central bank under Rajan. "There is lot of similarity between the thinking of the RBI and government... This is absolutely essential. As a representative of the government, I express my satisfaction. RBI is performing its role and I congratulate Raghuram ji and his team," he said.

At the same function, Finance Minister Arun Jaitley also congratulated Rajan, his team and past RBI Governors for their contribution in making the country's economy resilient.

Elaborating on the issue of financial inclusion, Modi urged banks to come up with creative financial inclusion instruments to help prevent farmer suicides, adding that providing assistance to farmers would also help in promoting environment friendly initiatives.

The Prime Minister also called upon the bankers to extend credit to resource rich eastern states.

The banks, which take pride in funding green initiatives, should also provide funds to farmers for planting trees which is as important as reducing carbon emission by factories, he said, adding: "I come as a representative of the poor, underprivileged, marginalised and tribals...I seek on their behalf and trust you will not disappoint me."

Modi further said that RBI, which will be completing 100 years in 2035, should work on the theme of financial inclusion and prepare a road map for achieving it.

The milestones for achieving financial inclusion could be 150th birth anniversary of Mahatma Gandhi in 2019, 75th year of Independence in 2022, 90th anniversary of RBI in 2025 and 100 years of RBI in 2035, he said.

Underscoring the need to nurture strong institutions like RBI, Rajan 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."