Congress leader Rahul Gandhi and former RBI governor Raghuram Rajan discussed the economic effects of Covid lockdown in a video chat. Rajan stressed that with 100 million people put out of work, India must open up the economy in a measured way, and called for a relief package of Rs 65,000 crore.
ThePrint asks: Is Raghuram Rajan a well-meaning economist or partisan critic?
Rajan spoke as an independent economist, cynicism is natural in an era where Akshay Kumar interviews Modi
National spokesperson, Congress
The world is facing an unprecedented era of uncertainty and gloom. At the very beginning of the pandemic, Rahul Gandhi and the Congress party had made it very clear that we are here in solidarity with the Narendra Modi government and will help find answers.
The government implemented some of the suggestions made by Sonia Gandhi, P. Chidambaram and Rahul Gandhi. A responsible leader does not wait for a calamity to take its toll and then lord over the debris of what is left behind.
Rahul Gandhi provides much required leadership at a time when everything is seen through the prism of partisan politics. Raghuram Rajan and Rahul Gandhi spoke about the problems the country is facing and the possible solutions. While Rahul was frank in his observations of inequalities having increased over the decades, Raghuram Rajan spoke as an independent economist — as a professional.
The cynicism of your TalkPoint is natural in an era where an Akshay Kumar gets to interview Prime Minister Narendra Modi, ask questions such as how does he like to eat his mango — and it doesn’t bother anyone. But doubts are raised when economist and former RBI governor Raghuram Rajan holds a conversation with Rahul Gandhi on reviving the economy.
There is always a choice between diagnosis today or autopsy tomorrow. Rahul chose diagnosis and he chose Raghuram Rajan to help him with it.
Rahul Gandhi asked questions that were on everyone’s mind but Raghuram Rajan didn’t give explicit answers
National spokesperson, BJP (Economic Affairs)
As a globally noted economist who has worked closely on the Indian economy, Raghuram Rajan should have been more candid and in-depth with his answers during his interview with Congress leader Rahul Gandhi.
Gandhi asked questions that were on everyone’s mind but they weren’t met with explicit suggestions. For example, Rajan said Rs 65,000 crore was required to help the poor but gave no explanation on how he arrived at that figure. Besides, the Modi government has already provided Rs 28,256 crore through the Pradhan Mantri Garib Kalyan Yojana out of the total package of Rs 1.7 lakh crore.
Also, the issue of major loan defaulters like Nirav Modi, Vijay Mallya and Mehul Choksi didn’t arise in the conversation. Perhaps it’s because Rajan was the RBI governor and the Congress was in power when some of these loans were given out.
That’s not to say that this conversation, meant to be about the economy, wasn’t politicised. Gandhi’s questions about “authoritarian governments” and centralised power structure in India were political enough and, might I add, irrelevant. He forgot about the Emergency imposed by the Congress.
Rajan’s estimate of Rs 65,000-crore package for the poor should not be dismissed
Professor of Economics at the School of Arts and Sciences at Azim Premji University
Raghuram Rajan is a well-meaning economist who is honest about his ideas and has been involved in distinguished public service as RBI governor. It’s unfortunate that he is being accused of partisan politics.
As far as his estimate of Rs 65,000-crore package for the poor is concerned, many different numbers have been put forth by the likes of former CEA Arvind Subramanian and Devesh Kapur of Johns Hopkins University. That said, I wouldn’t be able to comment on how he arrived at this sum but given his expertise, it is not a number to be dismissed.
In the last few years, suggestions for or criticism of the Narendra Modi government have come to be seen as partisan or an attack. We have seen this whenever something comes up about data. Most recently regarding data on unemployment. I fear that we are perilously close to a situation where we cannot have a rational discourse.
Also, it’s not out of our purview to be thinking of decentralisation and granting state powers to deal with the Covid-19 situation, which is proving to be more localised. We definitely need central responses, but decentralisd power in this context is quite essential.
Rajan is being criticised by Modi government because his reading of the economic downfall has been correct
Business journalist
Economic data speak louder than words and it’s clear India is being hit where it hurts the most.
If the Narendra Modi government expected hosannas to be sung for its handling of the economy, Raghuram Rajan did not play ball. Only few economists will defend the Modi government’s performance.
Rajan’s impeccable credentials, his direction and leadership, if at all, have rarely been questioned at the RBI.
His suggestion for the government to take action against high-profile cases, where big businesses had loans outstanding against them, was one of the highlights. A parliamentary committee under former Union minister Murli Manohar Joshi had sought his inputs on the bad-loan crisis. It did not win him friends.
Rajan was the man who had warned against the unfolding subprime crisis in the US. It unfolded into a global financial crisis. Clearly, his credentials as an economist were never in doubt.
The fortuitous turn of events, catapulting the BJP to power, is perhaps what has led to the criticism of Rajan. His reading of the economy, of falling demand, and higher cost of finance have, ultimately, proven correct.
Rajan has raised issues that have been critical of the BJP government, which have led to heightened criticism of him. He also suggested former finance minister Arun Jaitley to make the government rein in spending, which did not make him endearing.
Also read: Is talk of lifting lockdown premature or is it necessary to allow some economic activity?
By Pia Krishnankutty, journalist at ThePrint