In a conversation with Rahul Gandhi the former governor of Reserve Bank of India (RBI) Raghuram Rajan as he joined the Bharat Jodo Yatra on Wednesday said that next year will be struggling for the Indian economy as well as for the world. It will be even difficult to attain 5% growth rate next year as key interest rate have increased and the exports have been slowed down, he said.
“We would be lucky if we do (grow at) 5% next year. See the problem with the growth numbers is that you have to understand what you are measuring with respect to. If you had a terrible quarter last year and you are measuring with respect to, you look very good,” said Mr Rajan.
“So ideally what you is look before the pandemic, in 2019, and look at now. And if you look at 2022 vis-a-vis, it’s about 2% a year. That’s too low for us,” the former governor said.
When he was questioned about the same he said the reason behind this low growth rate is Covid-19 itself and also because India was “slowing before the pandemic”. The country did not “generate reforms” which were required for growth, he further said.
While, on the issue of growing inequality the former RBI governor said that those from the upper middle class were able to increase their incomes as they could do work from home during the pandemic but those who worked in the factories failed to earn.
“So, this divide increased during the pandemic. Rich had no problem, the lower class got ration and other things but the lower middle class had a big damage. There were no jobs, unemployment increased,” he said with a recommendation that the policy makers must consider this divide.
Pressing on the issue he said that policies must be formulated by keeping the clear difference between these classes especially the lower middle class which suffered the most during the Covid-19 pandemic.
Meanwhile, BJP was unhappy with Mr Rajan joining the Congress’ Bharat Jodo Yatra in Rajasthan and also suggested that his views on Indian economy must be disregared calling them “coloured and opportunistic”.
Hitting back at the BJP, the grand old party said that by even putting the entire cabinet together cannot match the abilities of the economist.