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I Was Asked About Demonetisation, Said It Was a Bad Idea: 11 Important Quotes From Raghuram Rajan’s Recent Interview

The former RBI governor spoke spoke about a number of key economic challenges.

In an interview to NDTV, former Reserve Bank of India (RBI) governor Raghuram Rajan spoke on a number of issues that have recently been making headlines such as the tussle over RBI’s autonomy, effects of demonetisation and GST and the ban on cow-slaughter.

Here are 10 insightful quotes from the interview should give everyone, especially the government, a much needed reality-check:

On Demonetisation:

  • “Net impression is that it had a significant effect on our growth. The world was growing faster but we slowed down. There was a twin blow with the GST.”
  • “I was asked about demonetisation, I said it was a bad idea.”

On RBI’s independence.

  • “We can have faith in the institutions because they are protected by our democracy. If the governments lean too much on an institution, we have faith that the well-thinking people will come to the aid of those institutions,”
  • “When I was governor, we paid the highest dividend to the government. But that isn’t the issue any more. The government’s doesn’t just want the profit, it wants the excess.”

On the controversy over the recently released GDP back-series data:

  • “We need to have confidence on integrity of the data… Need to build credibility for our statistics. There’s enough controversy to have somebody independent to look at it,”
  • “We need an independent body of experts, Indian and international, to examine the methodology as it is important to maintain the credibility of our statistics.”

On ban on cow-slaughter:

  • He said that the policy was “..reflective of how we take actions without taking into account wider impact.”
  • “To do something about a cow you need to take care of old cows, their health. This makes the cow less of an asset to the farmer.”
  • “Any action has a reaction, general equilibrium… Ban on cow slaughter should be balanced by more gaushalas… And who pays for it..The cost falls on the person you didn’t intend.”

Rajan highlighted that the three most serious challenges for India right now are the agrarian crisis, banking crisis and the state of the power sector. He also said:

  • “Lack of jobs is a very serious issue. This reflects the problems that even at 7 per cent growth, it is not producing the jobs 25 million people applying for 90,000 railway jobs – that seems to me a reflection of the fact that we have a real job problem.”
  • ‘Lack of women participation in economy is very worrisome. We’re not creating opportunities for women.”

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