Rajan: India’s economic growth held back due to note ban and GST

Two successive shocks of demonetisation and the GST had a serious impact on growth in India. Growth has fallen off interestingly at a time when growth in the global economy has been peaking. — Rghuram

Rajan,

RBI ex- chief

the second B hat ta char ya Lectureship on the Future of India.

Rajan, in his address, said a growth rate of seven per cent per year for 25 years is “very very strong” growth, but in some sense this has become the new Hindu rate of growth, which earlier used to be threeanda- half per cent, Rajan said.

“The reality is that seven is not enough for the kind of people coming into the labour market and we need jobs for them, So, we need more and cannot be satisfied at this level,” he said.

Observing that India is sensitive to global growth, he said India has become a much more open economy, and if the world grows, it also grows more.

“What happened in 2017 is that even as the world picked up, India went down. That reflects the fact that these blows ( demonetisation and GST) have really really been hard blows... Because of these headwinds we have been held back,” he said.