Raghuram Rajan’s veiled attack on Modi govt! India not creating enough jobs; no improvement in fisc

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Updated: December 14, 2018 10:42 AM

Former Reserve Bank of India (RBI) Governor Raghuram Rajan on Friday launched a veiled attack on Narendra Modi government, saying that Indian economy is not creating enough jobs, and that there is no improvement in India’s fiscal situation in the last five years.

Raghuram Rajan on Monday reacted to Urjit Patel's decision to step down as Reserve Bank of India (RBI) governor and said that he has made a statement that the autonomy of the central bank should not be undermined.India needs to enhance its GDP growth beyond 7 percent to boost economy, Raghuram Rajan said while presenting University of Chicago’s economic agenda for 5 years.

Former Reserve Bank of India (RBI) Governor Raghuram Rajan on Friday launched a veiled attack on Narendra Modi government, saying that Indian economy is not creating enough jobs, and that there is no improvement in India’s fiscal situation in the last five years. India needs to do more on macro stability and fiscal deficit front, Raghuram Rajan said at a televised event in New Delhi.

India must enhance its GDP growth beyond 7 percent to boost economy, he said, adding that India’s exports are not growing despite higher quantities of cheap labour, and a fair amount of agri distress can be seen.

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Raghuram Rajan has other suggestions too for Indian economy. Earlier Wednesday, he had said that India needs to develop a good oil hedging policy as volatility will continue to rise in view of geopolitical factors impacting crude oil prices, he said at an event on Wednesday. “There is a very strong need for an oil hedging mechanism for a country like ours which is so dependent on oil,” Rajan said.

Rating agency Moody’s on Thursday said India’s real GDP growth in both FY19 and FY20 will slow to just above 7 percent. Earlier, the agency had estimated a GDP growth rate of 7.4 percent for FY19.

India needs 9.94 crore additional jobs over the decade, a report by global strategy consulting firm PwC said. Lack of concrete efforts could push India into ‘jobless growth’, it further said. Moreover, 80 percent of the new jobs demand would come from Tier 2 and Tier 3 districts of just 10 states.

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