Finance Minister Nirmala Sitharaman doing a tough job: Ex-RBI Guv Raghuram Rajan

Former Reserve Bank of India (RBI) Governor Raghuram Rajan said that Union Finance Minister Nirmala Sitharaman is doing a tough job.

Raghuram Rajan, who has been critical of the BJP-led central government’s economic policies such as demonetisation in the past, was speaking to India Today News Director Rahul Kanwal on the sidelines of the World Economic Forum summit in Davos.

When asked to rank Nirmala Sitharaman’s handling of the Indian economy as Finance Minister, the former RBI governor said, “I will not rank. I never did it. She has a tough job and she is doing a tough job and it’s not for me to give rankings to people doing jobs.”

Raghuram Rajan further said that the lower middle class is where the anxiety is.

“The lower middle class – that’s where the anxiety is. The lack of jobs. Big businesses are doing really well. They paid down their debt during the pandemic. Banks have written off their bad loans. So banks and businesses are ready-to-go. But the lower middle class has had a bad pandemic. Some have lost their jobs. Small and medium enterprises did not do so well. But they are coming back,” he said.

“Growth this fiscal year is spectacular at 7%. We grew fairly fast in the early part of the year, rebounding from the slow growth as a result of the pandemic, and if we look at the later part of the year, we have slowed down to a 5% rate and that is a worrying issue. Going forward, 5% may be even less given the effects of the slowing global economy. So we cannot be complacent,” he said.

But India cannot be complacent as yet, he warned. “From 2019 to 2022, how fast have we grown? 2.5% a year. Are you satisfied with 2.5%? We have some catching up to do. I would not be as complacent as the government’s economists,” he stressed.

INDIA’S STAND IN ‘CHINA+1’ WORLD

As more and more countries are looking at a China+1 or China+2 policy, where does India stand? “When people think about China’s replacement, their first thought is Vietnam or Thailand. India has an advantage – its size. India is not going to remain 3 trillion going forward, it will get much bigger. We have benefits of our own and we must augment them. People are looking for good logistics, power, and steady regulation,” Rajan said.