Ref­er­ence to Panama Papers

The Economic Times - - Econ­omy -

“I do be­lieve that we should al­low our en­ter­prises to find their way ... cre­ate the kind of in­fra­struc­ture struc­ture, the busi­ness en­vi­ron­ment which will al­low them to go where they de­cide to go,” Ra­jan said.

“My sense is that we have al­most ev­ery­thing for the leap in pro­duc­tion, whether it is man­u­fac­tur­ing or ser­vices, we can take the step for­ward … we also have to get ideas from ev­ery­where, and our young gen­er­a­tion is in that mode, it is will­ing to take the best of the world along with it.”

Ra­jan, who has stub­bornly fo­cussed on bring­ing down in­fla­tion and prod­ding a some­times re­luc­tant gov­ern­ment to com­mit to set right its fi­nances, is now ac­knowl­edg­ing that the econ­omy is on the right path af­ter years of soar­ing fis­cal and cur­rent ac­count deficits. His com­ments come on the back of an in­ter­est rate cut this week and more than a month af­ter the gov­ern­ment stuck to its fis­cal deficit road map in the Bud­get and an­nounced a big step-up in in­fra­struc­ture spend­ing.

Ra­jan was re­luc­tant to cut in­ter­est rates in the early part of his ten­ure and con­stantly em­pha­sised the need for the gov­ern­ment to con­trol ex­pen­di­ture and stick to its fis­cal deficit road map.

This put him at odds with not just the pre­vi­ous United Pro­gres­sive Al­liance gov­ern­ment but also with the Naren­dra Modi-led Na­tional Demo­cratic Al­liance, which came to power promis­ing jobs and in­creased in­vest­ment. Ra­jan was also highly crit­i­cal of the so-called trade-off be­tween growth and in­fla­tion, and in­sisted on keep­ing the fo­cus on bring­ing down sky-high prices.

He has been con­sis­tently cau­tious about In­dia’s eco­nomic prospects and re­cov­ery, only say­ing that parts of the econ­omy ap­pear to be re­cov­er­ing and that we are some dis­tance away from rapid growth.

“For the first time we are close to power suf­fi­ciency. I know the com­men­tary on the fact that some de­mand is not be­ing ex­pressed. But we are close (to suf­fi­ciency) and given that we are us­ing only 60-65% of the avail­able ca­pac­ity there is room for power pro­duc­tion,” Ra­jan said.

He ex­pressed con­cern about the ques­tions be­ing raised on wealth cre­ated by pri­vate in­di­vid­u­als in the light of the ‘Panama Papers’ rev­e­la­tions. “In­creas­ingly, this talk about whether en­tre­pre­neur­ial wealth is il­le­git­i­mate, whether self­made peo­ple should have what they have and whether that is some­thing that’s fair game,” Ra­jan opined.

“I think this is dan­ger­ous. And the fact that there are oc­ca­sions when peo­ple are found to be hid­ing their wealth as in the Panama al­le­ga­tions, es­sen­tially con­trib­utes to this process of de-le­git­imi­sa­tion.” The Panama Papers re­veal de­tails over 500 In­di­ans with links to off­shore firms.

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