Rajan's three-year tenure as RBI Governor comes to an end in September. There's no clarity on the government's stance on the issue yet.
The government will decide on Raghuram Rajan's term extension as the RBI Governor only in August, a month before his three-year tenure comes to an end, a senior official was quoted as saying by The Economic Times.
While the government has remained mum about its stance on Rajan's extension as the governor, Arun Jaitley recently evaded a question from a journalist saying the matter isn't something the government would like to discuss with the media.
BJP's Rajya Sabha member Subramanian Swamy has been pulling out pitchforks against Rajan, calling for his immediate termination from RBI. Swamy even wants Rajan to be packed off to Chicago from where's he's on leave from the University of Chicago. Swamy wrote a letter to Prime Minister Narendra Modi calling for Rajan's termination saying that his policies caused widespread unemployment and a collapse of industries.
The senior official quoted in the aforementioned report, however, said that Swamy's comments will not have an effect on the government's decision. Even the laurels that Rajan has been adorned with in the last three year, will not be considered -- Rajan was named the Best Central Banker in the world by 'The Banker' magazine, a reason many have quoted while endorsing a second term for the Governor.
While Rajan is seen as a strong regulator, including his crackdown on bad loans and bringing banks to task over non-performing assets, officials in the report say that his policies are not considered "accomodative enough" by the government.
Rajan and government officials have been at loggerheads several times over the last three years, usually in the run up to the bi-monthly monetary policy meets, where the government, at times including Finance Minister Arun Jaitley and the industries would call for a rate cut to boost investment and growth. But Rajan has always stood his ground and only slashed rates much often causing dismay.
Raghuram Rajan was picked by the previous UPA government to be the RBI Governor on September 4.
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 "RBI Governor Raghuram Rajan")
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