Implementation remains the major challenge for India’s economy and if it can deliver on its promises the country will be “the place to be”, RBI governor Raghuram Rajan has said.
When asked to nominate the three things that most need to change to make a difference to the Indian economy Rajan said, “Implementation, implementation, and implementation”.
“The gap in India has always been between the promise and the execution,” he said.
“If anybody was to look towards a big source of demand in future it would be hard for them to miss India,” he said adding “if our implementation matches our promise I have no doubt that in the next five or 10 years this will be the place to be so good to get in early”.
Rajan told Australia’s Sydney Morning Herald that he believes the “implementation gap” which had plagued India in the past is narrowing.
The central bank head said, “I would argue that because of the common language different accents but common language I think there could be a lot going on there”.
Rajan praised the role of Australia’s Productivity Commission in developing economic policy.
“Clearly there is a lot to learn about how you have used the intellectual inputs, the economic inputs, from that kind of organisation,” he said.
“There are so many places two large economies can learn from each other,” he added.
When asked about Australian companies, like ANZ and Telstra, which have made promising investments in India in recent decades only to retreat at great cost, Rajan said “I’m not sure it is anybody’s fault there have been periods of strong growth and there have been periods where people have thrown in the towel and said it is impossible doing business”.
Rajan said India needed to improve its infrastructure, human capital (knowledge base of the population), regulations and access to finance.