Raghuram Rajan's take on economy, banking, diesel prices

Written by ENS Economic Bureau | Mumbai | Updated: Sep 16 2014, 13:57pm hrs
Raghuram-RajanRBI Governor Raghuram Rajan speaks during FICCI's FIBAC 2014 in Mumbai. (PTI)
Reserve Bank of India Governor Raghuram Rajan on Monday said the government should consider banks as 'independent entities' that take their own commercial decisions, and not as its extended arm.

Here are are Rajan's major takes on some key subjects:

On the economy: Rajan said Indias macro-economic indicators are improving and inflation is coming down but theres still some way to go. The recovery is still uneven, Rajan said, adding that data showed that industrial production has not picked up.

On diesel prices: Lower crude oil prices are helping consuming countries like us. Typically a lower oil price means a lower CAD, lower oil subsidies and lower inflation. We need to seize this moment ... We should take this moment to eliminate diesel subsidies as soon as possible, Rajan said.

on Jan Dhan Scheme: Rajan asked banks not to compromise on core objectives of the programme. When we roll out the scheme, we have to make sure it does not go off the track. The target is universality, not just speed and numbers, he said. The scheme can be a waste if it leads to duplication of accounts, he added.

On IIP figures: Rajan also said the latest weak IIP data only underlines the fact that the economy needs a pick up in investment growth and that the recovery is still uneven. ... but it is in my view this is a recovery from the fairly low levels of growth we had reached. But capital goods production came down once again, durables good production has not picked up ... however, good auto sales suggest that perhaps that may augur good consumption numbers going forward.