Governor Raghuram Rajan
has just given a series of wide-ranging, hard-hitting interviews on a host of burning topics while launching his new book “The Third Pillar
His answers to various questions broadly feature one underlying theme: What India really requires for a change in fortune, and what it should vote for in the 2019 general elections.
India needs a strong internal economy which should be the focus of the 2019 general elections, Rajan said. He drew from China’s example to drive home his point: “China has focused on going strong economically first. Now we can see they have a pretty significant army and defence system.”
Another prime area of focus should be enhancing India’s growth rate, Rajan maintained. In a separate interview with CNBC, Rajan revealed he doubted that India was really growing at 7%.
He said the uncertainty over GDP data needed to be cleared by appointing respected economists to oversee the exercise.
The part the celebrated economist said he finds most worrying about India is that joblessness — effectively the gravest of India’s problems — has not drawn the attention it should have.
Rajan said he considered it a serious matter that high-school degrees are no longer fetching people any jobs. India’s job market is highly skewed in favour of passouts from reputable institutions like the IIMs, but a pathetic future awaits for jobseekers at the other end of the spectrum, he lamented.
The former RBI governor spoke extensively on the hotly-debated NSSO survey. “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,” Rajan told a news channel.
About jobs data in India, Rajan voiced his opinions in no uncertain terms. “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,” he replied to NDTV’s question of the credibility of government data.
Rajan said it would be a misrepresentation of facts to say that people didn’t want jobs. “Many of the recent youth unrests in the country are just an indication of young Indians trying and failing to land government jobs because such jobs promise 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,” Rajan said. Rajan had views to air on nationalism too: “Nationalistic movements create friction within the country and it also creates friction between countries.”
The devil lies in the details, Rajan replied when asked about India’s latest political hot potato — the feasibility of Rahul Gandhi’s promise of the Rs 72,000 dole to India’s poorest of the poor.
“Is it going to be an add-on or substitute a bunch of things? How do we get to the poor?” Rajan asked while sheding light on the practical side of Rahul’s big-bang announcement.
Handing money to the needy directly is a better way to empower them; it’s something borne out by various experiences, the governor said. “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.”
Rajan was also asked for his views on the ongoing reconsitution of company/institution boards with members from political parties. He said he had no issues with these board resets as such. He, however, added a rejoinder that if such exercises were to become the prime focus, it will lead to an unbalancing of institutions.
Rajan chose the occasion to drop a sizeable bomb on demonetisation. And he had an loaded observation to make: “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.”
India also needs to bring greater transparency between the government and the private sector, Rajan said.