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‘I’m In Favour of Direct Cash Benefits Targeted at Poverty Alleviation’: Key Quotes From Raghuram Rajan’s Recent Interviews

In interviews given to HTN, ET Now, NDTV, CNBC-TV18, the former RBI Governor spoke about jobs, rural distress, NYAY & other issues.

Former RBI governor Raghuram Rajan gave a series of interviews to HTN, ET Now, NDTV, CNBC-TV18, in which he spoke about the upcoming election, nationalism, Congress’ Nyuntam Aay Yojana (NYAY), employment, demonetisation and other issues relevant to the Indian economic sphere.

Following are a few noteworthy quotes from these interviews:

On nationalism and populism: 

  • “They create friction within the country and it also creates friction between countries.”
  • “My worry is when one side is more effective than the other, we don’t get a balance. As a country we also need a sense of fairness in debate. We need respect for each others’ view. We need tolerance. Having a group which tends to shut out that debate and is much more effective at doing that is problematic.”
  • “Populism is ultimately finger pointing at the elite and saying you haven’t done enough… People that ride the populist wave can be… the left… who say the problem is the rich… and the right… (who say) the problem is minorities and immigrants who are challenging you… for jobs… and (so) subdue them.”


  • “We have great jobs for people leaving premier institutions like IIMs, etc, but that is not the case for a majority of students leaving schools and colleges which are not of that level of repute.”
  • “We are facing a tech revolution…It is changing our ability to get jobs and income…The ability to get easy middle class jobs is getting harder and harder.”
  • “When you have the general sense that the system is not providing these jobs there is anxiety, and…at the same time you look around for people to blame.”
  • “The youth are looking for jobs… there is a great hunger for good jobs in India, but not as many to offer. There is not enough focus on joblessness. I think the reality is if you look at the total evidence … 25 million people are applying for 90,000 jobs in railways. That shows a huge hunger for good jobs.”
  • “In India we have to think about job creation in itself. The employment numbers are all over the place.”

Also Read:  Periodic Labour Force Survey: 4.3 Crore Jobs Lost in Rural India Between 2011-12 and 2017-18

On statistics:

  • “Jobs statistics have been very poor for a long time. We need to improve the collection of these… cannot rely on EPFO or other make-do versions, need to collect better jobs data. It is problematic to say that people don’t want jobs. Some of these agitations are a reflection of the fact that youth are looking for jobs, especially in the government because that promises security. We need to take a very clean independent look at our statistics. We need to get a panel of independent experts to go through that.”
  • He said, “The idea is to spread enough confusion that you don’t trust the technocrats or the experts anymore.”

Independence of institutions:

  • “I have no problem with people from political parties coming on to various boards of institutions, but if that becomes the area of focus, then I am afraid our institutions and boards will become unbalanced.”
  • “The will of the people doesn’t extend to curbing institutions. You (The government) are constrained by the laws, checks and balances. It has to operate by that. The government created these institutions to stand in front and stop it from doing really bad things.”

On Demonetisation:

  • Rajan said, “The justification was populist but the outcome was very much detrimental to poor people.”
  • “It might be useful to go back and see how that decision was taken. What has the government learnt from this? There is a need for self-examination, based on actual data. The government needs to ask if it (note ban) worked or didn’t and then improve.”

Also Read:  Demonetisation Killed The Informal Sector, 10-12 Million Jobs Were Lost: Raghuram Rajan in new Freakonomics Podcast

On Congress’ minimum income guarantee, NYAY:

  • “I’m in favour of direct cash benefits targeted at poverty alleviation.”
  • “Direct benefit transfer has benefits… reducing leakage but empowers the beneficiary… programme”
  • “What matters is the details. Is it going to be an add-on or substitute a bunch of things? How do we get to the poor? We have seen over time that giving money directly to the people is often a way of empowering them. They can use that money for the services they need. What we need to understand is what are the things or schemes (subsidies) that will be substituted in the process.”
  • “The scheme can be funded by cutting overlaps in other ongoing schemes or by higher taxes.”
  • “it is important that schemes offered to poor do not hold them back from job hunting. The basic idea is to target the poor and give them an ability to create good livelihood.”

Also Read:  Consulted Big Economists Including Raghuram Rajan On NYAY: Rahul Gandhi

Reviving agricultural sector:

  • “I would focus on short-term actions that could put a lot of projects back on track that are still stuck, clean up the banks…and try and find two or three key reforms which could unleash growth,”
  • “One of them (the reforms) has to be how we revive agriculture in a way that reduces distress. Second would be an issue of land acquisition; can we learn from the best practices of the states and find methods that seem fair and in a sense also give states the freedom to pick the method that works best for them so that we learn from each other’s experiments…”
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