Populist Nationalism Damages Economic Growth: Rajan
Populist nationalism is potentially quite damaging to economic growth, and it is often articulated as the majority community's feelings of aggravation at being discriminated against, former RBI Governor Raghuram Rajan said on 26 November.
In a conversation, the recording of which was shown at the Times Litfest event in New Delhi, he said that populist nationalism is on the rise all over the world and India is not immune to it.
"It exists all over the world and also in India, while people exploit this sense of grievance," he said, noting that the issue of reservations in the country is an instance of the phenomenon.
He described populist nationalism as "inward looking", while policies it advocates "often come in the way of growth."
"These protests have a sense of identity that is being eroded... that cry also has to be heard," he added.
The ex-governor of the central bank said in the ultimate analysis, democracy is India's strength.
"There may be push and pulls in the working of democracy, but in the long-term it is beneficial. It is egalitarian, takes people along together, a superior mechanism to identify the flaws in the market system and for the system to react," he said.
About "illiberal democracy", Rajan, who is currently professor in the University of Chicago, said that it was "a function of the system, which kowtows to the strong leader."
"Limited access societies have captured the pathways to wealth," he said while describing "crony capitalism."
There exists a "cosy relationship" between the corporate and the political leadership in which the mass media, mostly owned by corporates, is implicated, Rajan added.
(This article has been published in an arrangement with IANS.)
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