Raghuram Rajan slams ‘jugaad’, bats for strong institutions | business | Hindustan Times
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Raghuram Rajan slams ‘jugaad’, bats for strong institutions

business Updated: Sep 18, 2015 23:04 IST
HT Correspondent
HT Correspondent
Hindustan Times
RBI governor


Taking a different stance on ‘jugaad’ by Indians, RBI governor Raghuram Rajan on Friday said the approach to work around problems and take a shorter, evasive route does not help the quality of growth.

“Jugaad is a very Indian way of coping, but it’s predicated on a difficult business environment. It encourages an attitude of shortcuts and evasions, none of which help the quality of final products or sustainable economic growth,” Rajan said. “We must stick to building institutions and create a path of sustainable growth so that jugaad is no longer needed.”

Famously known as an attribute typical to Indians, the ‘jugaad’ way of working has at times been derided by the developed world or by the more disciplined Asian countries such as Japan and Korea in joint ventures here, where they have encountered the trait in daily interactions with Indian counterparts.

In a paper last year, noted management guru Karine Schomer recounted her conversations with senior officials of NASA ISRO joint projects, hailing the innovative approach of Indian scientists in tackling complex issues of the space. “We had a high-profile case in point for a fundamental aspect of the Indian mindset that needs to be understood and negotiated on a daily basis by all those who work with Indian partners and counterparts. This approach and way of thinking is captured by India’s art of ingenious improvisation: jugaad,” she wrote.

Rajan’s speech at the CII conference also drew on interesting links between management and service, where he pointed at the lucrative pull of the lower half of the ‘pyramid’, explaining why the central bank felt the need to allow payments banks and small finance banks, and how micro-finance institutions were profitable while serving the poor and the unserved.