NITI Aayog vice-chairman Rajiv Kumar blames former RBI chief Rajan’s actions of cleansing banking sector of NPAs for slowdown of economy.

New Delhi: The shock to the economy was not caused by Prime Minister Narendra Modi’s demonetisation gamble in November 2016, but because of the policies followed by former RBI governor Raghuram Rajan, NITI Aayog vice-chairman Rajiv Kumar has told ThePrint.

By focusing on cleansing the banking sector of its non-performing assets, Rajan had effectively rendered the economy comatose, Kumar said.

As a result, the banks had no money to lend to industry when they most needed it. So, all through 2016, much before demonetisation took place in November, the economy was on a downward spiral, he added.

“When you give crocin to an ill person every two hours instead of the prescribed eight, then the person will become comatose,” said Kumar.

He emphasised that the policies followed by the former RBI governor had had the same effect.


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Kumar would not say whether demonetisation’s effect was to exacerbate the shock. “These are two different processes. We don’t know. We don’t have the data for that,” he said.

The NITI Aayog leader, a widely-acknowledge defender of demonetisation (“I have said that prime minister Modi’s gamble was a very good one”) also defended the falling rupee, saying that it had to find its level, and there was no real distress associated with it.

When the rupee lost 25 per cent in 2013 that was a cause of concern, but not today, he said.

Kumar also said he had no problems accepting the Sudipto Mundle report commissioned by the Ministry of Statistics & Implementation, whose recently generated data series awarded the Manmohan Singh-led UPA a fantastic 10.3 per cent growth in 2013.


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“Question is, what happened after that quarter. The data shows that the economy went into a free fall, until it had touched 5.3 per cent in the April-June quarter in 2014 around the time of the elections. I have always maintained that Mr Modi inherited a very bad economy,” Kumar said.

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  1. Prof PK Sharma, Freelance Journalist,Barnala(Punjab)

    What an irony ! Mr. Rajiv Kumar Niti Aayog Chief is reacting on failure of demonetisation and plight of Indian economy !
    May be Mr. Urjit Patel Governor Reserve Bank of India, now asked to react on the functioning of judiciary and law and order ,lynching,
    atrocities on dalits and minorities !

    Wonderful game of hide and seek you see in progress in NaMo led NDA regime !

    Very amazingly ” right ” does not know where the ” left ” is ? Today Mr.Rajiv Kumar is holding Dr.Raghuram Rajan responsible for the
    sad and bad state of affairs of India’s economy !

    Surmise, tomorrow Mr.Urjit Patel Governor RBI may say no no it was not Dr.Rajan but Dr.Manmohan Singh former Governor RBI !

    It is sheer mockery of governance in the country ! If NaMo can play havoc with the historical facts then nothing strange that after all Mr.Rajiv Kumar is also following the footprints of his “boss” !

    Why these lame defences of ill-conceived,ill-planned and ill-executed decision of demonetisation-the brain-child of none else than
    Pradhan Sewak of India !

    Why is he maintaining a close guarded silence over this broad day light failure of his and his own decision !

    The style in which he himself declared this decision on TV Channels on November 8,2016 he should be bold and courageous enough to
    own responsibility for the failure of his decision.

    But how it could be because NaMo is in the habit of “Heads I win,tales you loose?”

    All in all, the powerful duo of NaMo-Amit Shah for the past many months have been reflecting signs of nervousness,frustration, desperation and confusion !

    By fielding Mr.Rajiv Kumar to defend failure of demonetisation owing to Dr.Rajan ‘s policies not because of NaMo,the duo evidently
    has pushed itself to the backfoot as well as oblivion !

    I am reminded of a couplet when I find the duo ‘s mad race for regaining reins of power in a state of disappointment, restlessness and hopelessness !

    “Nazar Aati Nahin Manzil
    Andhere Hi Andhere Hain ” !
    (The destination does not seem to be in sight but darkness and darkness is in the offing ! )

    Prof PK Sharma, Freelance Journalist
    Pom Anm Nest,Barnala (Punjab)

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