Banking reforms led by RBI Governor Raghuram Rajan would not be hampered when he exits in September as India’s macroeconomic policies are fairly strong, World Bank Country Director India Onno Ruhl said today.
“I really want to point out that India has a really very strong macroeconomic policies and an effective and conservative supervisor. So there is no reason to expect that (banking reforms) to change,” Ruhl told reporters here.
He was responding to a query whether the impending change of guard at the Reserve Bank of India will impact the reforms initiated by Rajan.
“I don’t have the ability to predict the future, I just have to say that we fully respect Dr Raghuram Rajan’s personal decision,” he added.
Buffeted by political attacks coupled with unending speculation over his continuance, Rajan on Saturday announced that he would return to academia after expiry of his term on September 4, putting to rest all speculation over the issue.
On double-digit economic growth of 10 per cent, Ruhl said it is imperative to have a favorable global environment in addition to the domestic advantages.
“You need large consumption but then you also need favorable global environment. It is not impossible to achieve that (higher growth rate),” he said while releasing the India Development Update here.
He also underlined that India is the fastest growing larger economy where public investment remains an important factor.
On the employment front he said that many jobs in India “unfortunately” are created in the informal sector which is a complicated thing.
Ruhl lauded the government’s efforts in boosting the infrastructure. “Construction of highways is picking up and the highways are very important part of the infrastructure to drive growth”.