Unemployment, agrarian distress, biggest challenges: EX-RBI guv Rajan

NEWDELHI: Lack of jobs, agrarian distress, the power and banking sectors are the biggest challenges to India’s economy, former Reserve Bank of India (RBI) governor Raghuram Rajan said in a television interview broadcast on Sunday.

Rajan, who headed the country’s central bank between September 2013 and September 2016, reiterated his opinion that the November 2016 demonetisation exercise was a “bad idea”, but praised the Goods and Services Tax (GST) as “good in the long run but had teething problems” in the interview by NDTV. “Net impression is that it (demonetisation) had a significant effect on our growth. The world was growing faster but we slowed down. There was a twin blow with the GST,” Rajan said.

On the dispute between the government and the central bank over a mechanism to calculate the dividends that are paid out every year by the RBI, Rajan said there was “always a pressure to pay the government more”. “When I was governor, we paid the highest dividend to the government. But that isn’t the issue any more. The government’s doesn’t just want the profit, it wants the excess,” he said.

Net impression is that it (demonetisation) had a significant effect on our growth. The world was growing faster but we slowed down. There was a twin blow with the GST RAGHURAM RAJAN , former RBI governor