Economy on Right Track, Confident of More Growth: Raghuram Rajan

RBI governor Raghuram Rajan’s current term will end in three months.

2 min read
RBI Governor Raghuram Rajan (Photo: Reuters)

Confident about India’s growth picking up further with “more animal spirit” and good monsoon, RBI Governor Raghuram Rajan on Wednesday said that the economy is on the right track, though “true numbers” of GDP could be 1 percent up or down.

I would hope that with good monsoon, strong rural demand, with more animal spirit and public investment picking up pace...I think with all that coming together there will be need for private investment. We have some way to go. I am not saying that economy is where it should be. We do have work to do. We can celebrate when we see private investment strongly back on track and I think we are capable of much stronger growth that we have right now.  
Raghuram Rajan

According to The Economic Times report, Rajan said, “We are still a relatively poor economy and to wipe the tear from every eye, one would at least want to be middle-income around $6,000-7,000 which, if reasonably distributed, will have dealt with extreme poverty. And that is two decades worth of work to be even moderately satisfied.”

On the controversy surrounding the GDP numbers based on new calculations, he said statisticians have done as good a job as they can and economic growth is significantly high as costs have come down.

And really, what matters to us is change. And the change has been broadly in the positive direction... I think we are starting to change in the right direction. There may be difference of 1 percent on either side in the GDP numbers.

The GDP numbers, announced last week, pegged India’s growth for 2015-16 at 7.6 percent – the fastest among the world’s major economies – but Chief Statistician TCA Anant admitted to “discrepancies” in the GDP data, which soared to Rs 2.14 lakh crore, or up to 1.9 percent.

Anant said the government is making efforts to minimise the discrepancies in the computation of the national income or GDP data by relying more on data available under e-governance programmes and corporate accounts.

Rajan further said that some people will quibble that the high GDP numbers do not reflect the ground realty.

I think we will have to be little careful there. The top line has only started growing recently, that is sales. But costs have come down tremendously and GDP or GVA calculates difference between your sales revenue and costs, that is the value addition.

(With PTI inputs)

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