In­dia’s Grow­ing Fast, But Still a Long Way to Go, Says Ra­jan

Re­serve Bank chief crit­i­cises bid to get to lit­eral mean­ing of ev­ery phrase ut­tered by pub­lic fig­ures

The Economic Times - - Economy & Companies - Saloni.Shukla @times­group.com

Pune: RBI Gov­er­nor Raghu­ram Ra­jan cau­tioned that be­ing the world’s fastest-grow­ing ma­jor econ­omy shouldn’t breed com­pla­cency, set­ting in con­text his re­mark that “in the land of the blind, the one-eyed man is king”. The lat­ter com­ment, made re­cently in the US about In­dia’s growth in the back­drop of global eco­nomic un­cer­tainty, ap­pears to have hit a po­lit­i­cal nerve.

“Growth… is just one mea­sure of per­for­mance,” Ra­jan told stu­dents grad­u­at­ing from NIBM in Pune on Wed­nes­day. “The level of per capita GDP is also im­por­tant. We are still one of the poor­est large coun­tries in the world on a per capita ba­sis, and have a long way to go be­fore we rea- son­ably ad­dress the con­cerns of each one of our citizens.”

He com­pared the country’s record with that of its north­ern neigh­bour, the world’s fastest-grow­ing econ­omy un­til be­ing over­taken by In­dia.

ON PER CAPITA IN­COME

“We are of­ten com­pared with China. But the Chi­nese econ­omy, which was smaller than ours in the1960s, is now five times our size at mar­ket-ex­change rates,” he said. “The av­er­age Chi­nese ci­ti­zen is over four times ri- cher than the av­er­age In­dian. The sober­ing thought is that we have a long way to go be­fore we can claim we have ar­rived.”

As head of RBI, he needed to have a clear-eyed, non-tri­umphal­ist view. “As a cen­tral banker who has to be prag­matic, I can’t get eu­phoric if In­dia is the fastest-grow­ing large econ­omy. Our cur­rent growth cer­tainly re­flects the hard work of the govern­ment and the peo­ple of the country, but we have to re­peat this per­for­mance for the next 20 years,” Ra­jan said. “We can­not get car­ried away by our cur­rent growth su­pe­ri­or­ity, for as soon as we be­lieve in our own su­pe­ri­or­ity and start dis­tribut­ing fu­ture wealth as if we al­ready have it, we stop do­ing all that is re­quired to con­tinue grow­ing… This movie has played too many times in In­dia’s past for us to not know how it ends.”

He also made the point that at­tempt­ing to get to the lit­eral mean­ing of ev­ery phrase ut­tered by a pub­lic fig­ure would sti­fle de­bate.

“My in­tent was to sig­nal that our out­per­for­mance was ac­cen­tu­ated be­cause world growth was weak, but we in In­dia were still hun­gry for more growth,” Ra­jan told the stu­dents.

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