Former RBI governor Raghuram Rajan, who joined Rahul Gandhi’s Bharat Jodo Yatra on Wednesday, predicted that next year will be difficult for both the Indian economy and the rest of the world. In an interview with Rahul Gandhi, Rajan stated that the Indian economy will struggle to achieve 5% growth next year because key interest rates have risen and exports have slowed.
“We’d be lucky if we expand at 5% next year. The issue with growth numbers is that you must understand what you have been measuring. If you had a bad quarter last year and are measuring against, you look very good “Rajan stated.
“So ideally what you look at is before the pandemic, in 2019, and look at now. And, looking ahead to 2022, it’s about 2% per year. That is far too low for us.”
When asked about the cause of the slowdown, the former RBI governor stated that the Covid-19 pandemic was “part of the problem,” adding that India was “slowing before the pandemic.” He claimed that the country failed to “generate reforms” required for growth.
In response to the challenges of rising economic inequality, Raghuram Rajan stated that the income of the upper middle class increased because they were able to work from home during the Covid-19 pandemic, while those who worked in factories lost their earnings.
“As a result, this divide widened during the pandemic. The wealthy had no problems, while the lower classes received rations and other benefits, but the lower middle class suffered greatly. There were no jobs, and unemployment rose “He added that policymakers should think about this class.
He emphasised that policies should be developed with the lower middle class in mind, as they suffered the most from the coronavirus pandemic.
The BJP attacked Rajan for participating in the Rajasthan Congress foot march and said his analysis of the Indian economy should be dismissed with “disdain” because it is “coloured and opportunistic.”
Vijay Chauthaiwale, the head of the BJP’s foreign affairs department, tweeted, “One former RBI governor became the head of government, and the country lost ten years. India will not make the same mistake again, thanks to Modi. RRR (Raghuram Rajan) is capable of walking from Delhi to Chicago.”
Congress responded by claiming that the entire cabinet cannot match the economist’s abilities.
P Chidambaram, a senior Congress leader, responded to the BJP’s criticism by tweeting, “Why is the BJP so offended by Rahul Gandhi’s conversation with Raghuram Rajan? Because Prime Minister Modi does not meet with economists, and economists do not have access to PM Modi.”
