Former RBI governor Raghuram Rajan expressed himself at Davos in a meeting of World Economic Forum regarding various key issues concerning India.
Rajan: Coalition government will disturb India’s economic growthFormer RBI governor Raghuram Rajan has pointed out that the growth rate of India will slow down in case a coalition government is formed at the center. He did not mention mahagathbandhan explicitly but clearly indicated that it would be better for India, if a single party gets majority on its own.
Rajan had a mixed response to Modi government’s key economic reforms. He rejected demonetization but welcomed GST and Insolvency and Bankruptcy Code. He urged the need of giving an autonomous status to the Reserve Bank of India, making it a body which is free of government control. The main reason why Modi government could take strong measures was the fact that just one party could manage to get majority seats in Lok Sabha on its own.
He felt that the best person in the cabinet deserves to handle the human resource ministry; he added that reforms in schooling were of prime importance as India won’t be able to compete globally with its current education system.
He was highly concerned for rising NPAs (non-performing assets) in public sector banks; he felt that these banks should be less politicized and that bureaucracy has hijacked their growth. Rajan denied playing an active role in politics in time to come but said that he stays in touch with politicians from all sides.