Interview

Demonetization was a bad idea: Ex- RBI Governor Raghuram Rajan

New Delhi: The former Governor of the Reserve Bank of India (RBI) Raghuram Rajan, in an interview to a private news channel NDTV, said demonetization has not favored the economy. He added that unemployment in India is a major issue. To meet his views on joblessness in the country, he cited the example of how 2.5 crore people in the country applied for 90,000 Railway jobs.

Criticizing the government’s move to ban high denomination currency and said that it was a bad idea.

The former RBI Governor also said that India suffered because of note ban as well as Goods and Services Tax (GST).

He added, “Not just foreign but even for domestic investors, there has to be confidence, there has to be a sense that the rule of law is upheld and to the extent that India is very well positioned for growth so we should be protecting institutions because we will need them.”

Agrarian distress is a huge problem, he said, while recognizing power and banks as other main problems. While touching upon NPA issues in public banking sector, Rajan expressed disappointment saying that the public sector banks are still not adequately professionalized and there is a need to substantially improve risk management.

The noted economist explained that eventually, strong boards should be entrusted with all bank-related decisions, including the appointment of chief executive officers, who are held responsible for their performance.

Rajan resigned from the post of RBI Governor in 2016 for his academic assignments, called upon to save the autonomy of institution like RBI following the sudden stepping down of Urjit Patel.

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