On the sidelines of the annual World Economic Forum meeting in Davos, former RBI governor Raghuram Rajan opened up on a range of issues including the GST, demonetisation, current RBI governor Urjit Patel and economy of Western nations in a slew of interviews.
On the sidelines of the annual World Economic Forum meeting in Davos, former RBI governor Raghuram Rajan opened up on a range of issues including the GST, demonetisation, current RBI governor Urjit Patel and economy of Western nations in a slew of interviews. In a big thumbs up to the RBI, Rajan appreciated the work of the monetary policy committee (MPC) led by his successor, Urjit Patel. He said the six-member panel headed by Urjit Patel “is doing a good job” in focusing on inflation. He also talked about the Indian economy, saying that the it faced two big headwinds last year, in the form of demonetisation and the GST. The economy was held back relative to global economy partly because of these headwinds, he added. However, he maintained that in the long term, GST will have very positive effects.
Rajan also advised the Western economies to take note of the developing world. He said that the Western world must realise they cannot go a long way without the help of the emerging economies and warned that no one would be able to resolve any problem of a “fractured world” if things are not set right soon. Without naming any country, he said the West must realise that their population is aging and the demand for their products would mostly come from the emerging world.
Speaking at a session of the World Economic Forum (WEF) Annual Meeting, Rajan said there is a risk that by the time the West goes to the emerging world for their support, they may have to answer quite a few questions about why they did not share the benefits earlier.
Rajan appreciated the efforts of Singapore government in reducing inequality, he said, Singapore has done much to address the problems arising out of income inequality and the divisions in the society by setting up housing projects where the middle class and lower-middle-class families can live together.
Rajan, who is also a Chicago University professor, is known for his frank views on various economic and monetary policy matters and is credited with having predicted the global financial crisis of 2007.