Seeking to clarify his take on Indian economy being a “one-eyed king in the world of blind”, RBI governor Raghuram Rajan on Wednesday said, “My words were spun out of context. It is important for media to pay attention to the context when citing opinions expressed in interviews,” Rajan hit out.
Rajan’s statement had come under criticism from the government, with both Finance Minister Arun Jaitley and Commerce Minister Nirmala Sitharaman reacting sharply to the RBI governor’s words.
Rajan went on to say, “India is the fastest growing large economy in the world and its current growth reflects efforts of the government.” “The potential for further growth is undoubtedly high. One cannot get carried away with India’s current superior growth,” Rajan added.
“As a central banker who has to be pragmatic, I cannot get euphoric if India is the fastest growing large economy,” Rajan said in a speech to banking and finance students in Pune.
“We have to repeat this performance for the next 20 years before we can give every Indian a decent livelihood.” Rajan added the implementation of several reforms would be key to ensuring India posts high growth.
Expressing confidence about India’s future, Rajan said, “India is at the cusp of substantial pick up in growth. It needs to repeat economic performance in the future as well.” Rajan sees scope to grow faster given capacity utilisation & agricultural output.
Stating that the per-capita income of Indians remains lowest among BRICS, Rajan said, “We have a long way to go before we can claim we have arrived. We need to repeat this performance (economic growth) for 20 years before we can give each Indian a decent livelihood.”
He also said India’s global reputation holds great promise, but is seen as a country that has under-delivered and that it should “implement, implement, and implement” the structural reforms.
Last week, Rajan had been quoted as saying, “I think we have still to get to a place where we feel satisfied. We have this saying — ‘In the land of the blind, the one-eyed man is king’. We are a little bit that way.” Rajan had been asked for his take on the ‘bright spot’ theory.
FM Jaitley has virtually rebutted Rajan’s remarks, saying compared to the rest of the world, the Indian economy was growing much faster and, in fact, the fastest.
At 7.5 per cent growth rate any other country in the world would be celebrating but it is a tribute to India’s growth story that at this rate “we are still impatient because we know that our potential is to do distinctively better”, he said. (Read Jaitley’s response in detail)
Nirmala Sitharaman had reacted to Rajan’s choice of words for the Indian economy saying, “I may not be happy with his choice of words. I think whatever action is being taken by this government is showing results. FDI is improving, there are clear signs that manufacturing sector is reviving. Inflation, current account deficit is under control.” (What Sitharaman had to say)
(With inputs from PTI)