Raghuram Rajan says ready to help India overcome economic stress

New Delhi: A “straightforward yes” is what former RBI governor Raghuram Rajan said NDTV on being asked if he would return to India if his expertise was required for economic matters during the pandemic.

Ready to help India overcome COVID-19 economic stress

“If the virus spreads, as it has spread in Italy and the United States, we have to take it very seriously. What you see in these countries is a tremendous effect on public health, the overburdening of many hospitals and many deaths and of course, when that is happening economic activity is hard to carry on,” Mr Rajan said.

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Former Reserve Bank of India (RBI) governor Raghuram Rajan is willing to help the country if his assistance is ‘sought’ to deal with the economic stress where including several other factors, banking and aviation are facing a severe strain.

The government has allowed banks to defer EMIs by three months. The aviation and related sectors such as tourism have seen massive pay cuts and even layoffs after all flights were stopped and people cancelled their bookings.

The former RBI governor said “The world is almost surely in a deep recession”.

“Hopefully, we will see a rebound next year, and it depends on measures we take to prevent a recurrence (of the pandemic),” he told NDTV.

“The first sign of difficulties in India is often seem in foreign exchange. So far compared to other emerging markets our exchange rate has stayed quite stable, presumably from some support of the Reserve Bank of India. I should say we have depreciated some against the dollar, but you know countries like Brazil have gone down 25 per cent. We haven’t been in that situation,” he said.

The former RBI chief who is a big critic of demonetisation left the central bank after just one term after heavy criticism from segments of the government for offering opinions on matters unrelated to monetary policy.

In October last year, Mr Rajan said “Only internal cohesion and economic growth and not majoritarianism” will help strengthen India’s national security.

“In the long run, it seems to me that internal cohesion and economic growth rather than divisive, populist majoritarianism will be India’s root to national security. So all this sort of majoritarianism may certainly for a while win elections, but it is taking India down a dark and uncertain path,” Mr Rajan said at the OP Jindal lecture at Watson Institute, Brown University, on October 9.

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