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With Indian and other emerging markets facing severe headwinds on global economic growth, RBI Governor Raghuram Rajan today spoke about their relationship with the economy in a no-holds barred address at the WEF.(Image Source: Reuters)<br>Here are top 10 points to note in Raghuram Rajan speech:</br>
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1. Raghuram Rajan: There have been huge flows in emerging markets but one should also understand that tremendous changes are taking place in emerging markets. For example in India there is a massive online market which allows people in small towns and villages to buy things online. Real estate growth has been huge. A trader from Kashmir can sell his carpets to customers anywhere in the world. (Image Source: Reuters)
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2. Raghuram Rajan: The fall in various emerging markets were not due to weakness in their economies. I think it is markets problem and the market problem can hit the real economy too. (Image Source: Reuters)
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Raghuram Rajan not top-paid man at RBI<br> RBI Governor Raghuram Rajan, currently in the eye of the storm over his 'one-eyed is king among blind' remark, may be the most powerful person at the central bank, but he does not appear to be the top-paid one! As per the latest details published by the Reserve Bank of India (RBI) under the Right To Information Act, Rajan's total 'monthly emoluments' stood at Rs 1,98,700. This included a basic pay of Rs 90,000, Dearness Allowance of Rs 1,01,700 and 'others' of Rs 7,000.(Reuters)</br>
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4. Raghuram Rajan: It's not very clear whether we have benefitted from the way the rate tightening happened in the recent years at various central banks. Some central bankers in the past including in the US had indeed done a great job. (Image Source: Reuters)
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5. Raghuram Rajan: We are in a world of make believe. What exactly are the fundamentals? (Image Source: Reuters)
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6. Raghuram Rajan: Perhaps it takes time for efforts to show up in terms of asset prices, productivity etc and then times have changed. Earlier we used to see movies in theatres but now we see them on handheld devices. (Image Source: Reuters)
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3. Raghuram Rajan cautions on perceptions: Commenting on revelations in the Panama Papers, Reserve Bank of India (RBI) governor Raghuram Rajan cautioned on Thursday that perceptions about entrepreneurial wealth being illegitimate could be dangerous. “Increasingly, there is talk about whether entrepreneurial wealth is illegitimate, whether self-made people should have what they have and whether that is something of a fair game,” the governor observed, while speaking at CII’s Singapore Symposium, 2016. Rajan added that the fact that there are occasions when people are found to be hiding their wealth, as in the Panama allegations, essentially contributes to this process of de-legitimisation. (Reuters)
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8. Raghuram Rajan: I think there is a lot of uncertainties about how the fourth industrial revolution is playing out. There are various other issues that people are thinking about. (Image Source: Reuters)
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9. Raghuram Rajan: One of the problems with capital flows is the volatility and there is a problem with many emerging markets that they cannot handle the volatility. You need to improve the processes for that. (Image Source: Reuters)
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10. Raghuram Rajan: Besides, there is a need to actually increase the risk capital. A large amount of equity flows have come to India and they are doing well. When we have big risk capital, the risk appetite also goes up and the volatility can be handled much better. Our own defence is very well. (Image Source: Reuters)
