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Saturday, Oct 19, 2019

‘My wife will leave me if I join politics’: Ex-RBI governor Raghuram Rajan

Raghuram Rajan, a former chief economist at the International Monetary Fund who was denied a second term as Reserve Bank governor by the BJP-led government, also talked about the outgoing dispensation and the challenges awaiting the next in an interview with Mint.

business Updated: Apr 26, 2019 10:46 IST
HT Correspondent
HT Correspondent
New Delhi
Former Governor of Reserve Bank Of India (RBI) Raghuram Rajan
Former Governor of Reserve Bank Of India (RBI) Raghuram Rajan (Mohd Zakir/HT PHOTO)
         

The former governor of the Reserve Bank of India (RBI) Raghuram Rajan doesn’t think about joining politics or floating a political party will do any good to his family life.

Rajan, a former chief economist at the International Monetary Fund who was denied a second term as Reserve Bank governor by the BJP-led government, also talked about the outgoing dispensation and the challenges awaiting the next in an interview with Mint.

The 56-year-old spoke about Congress’ minimum income guarantee scheme Nyunatam Aay Yojna or NYAY and the BJP-led government’s successes in the interview in Chennai recently, where he attended a board meeting of liberal arts university Krea as a member of its governing council.

“First, my wife has said she will not stay with me if I join politics… Politics everywhere is similar. It is not particularly noisy or whatever, I don’t have any taste for it. Somebody else can give the speeches and gain the votes,” Rajan said when asked if he has something against joining politics.

He said he will not be “floating a party. My writings are all out there, you know my views. The point is I have no interest in politics. Absolutely none.”

And to speculations that he will be appointed as a minister if the Congress party is elected to power, Rajan said he is happy where he is.

“That’s too many steps, too far. Unfortunately, given the kind of work that I have done here, there is an expectation that my primary function is in the public arena. No, my primary job is academic. I like the job. I am a reasonably engaged academic. I have written a book recently (“The Third Pillar”) which is more intellectual than polemic. So given all that, I am very happy where I am,” the Katherine Dusak Miller Distinguished Service Professor of Finance at the US’ University of Chicago’s Booth School of Business said.

Rajan said he will also be happy to help in “some useful way”. “I am happy to do it. Sometimes people want advice, and I’m happy to do it”.

Also read: Raghuram Rajan says he will return if there is an opportunity to be of use

Talking about the outgoing BJP government, he said, “we have not moved the needle unlike what was anticipated”.

“It may be good enough to keep going, 7% is nothing to be sneezed at. Then is it 7% with or without jobs? That is another issue. The underlying theme is that growth has some concerns. Have we changed the kind of economic framework for the world of tomorrow? I’d say no. I’d say this is pretty much the framework we had for a long time.”

He, however, said the parameters of the successes of the government needs to be looked at carefully.

“There is continuity in governance. NDA looks a lot like what UPA did— emphasised the same thing like GST, Direct Benefit Transfer, Aadhaar. If you tick off all the reforms that have been done, there is a continuity in that. The question again is, is that good news? It goes back to, can we afford the average? And the job situation would suggest that we really need to think about do we need a reboot,” he pointed out.

Also read: Cash ban, GST held back India’s economic growth, says former RBI governor Raghuram Rajan

The next government whether it is the BJP coming back to power or a new one, he said, has to contemplate on the future of the reforms, think about the structures to tackle economic challenges and that jobs “will be no 1 for any new government”.

“It is not that there are no jobs, there are no good jobs. Do we have the economic apparatus to enable us for the next phase of growth? Do we have research forces in various universities that are gonna help industries become a force? I have not seen that,” Rajan said.

“Are we investing in areas of those researches are also not clear. Electric batteries for example. Are we able to take up the jobs that are leaving China? I’d argue, anecdotally, that investors prefer coming to Vietnam, or even some times Bangladesh, than here. So, jobs will be no 1 for any new government,” he added.

When asked whether Congress’ NYAY is a better way to transfer cash than welfare schemes, he said the country needs “structures around the market to help people live productive lives”.

“The broader point about direct income transfers, which both NDA and UPA have agreed on, is that it can empower people. That doesn’t mean in every place the government will open a medical dispensary for the people to be able to buy. But once they have money power, people can go to private dispensary set up. And now that people have money to buy, the medicine is actually there. This is how they will evolve. It is not just about what it will do today,” he said.

He also talked about the similarities in the anger people have in India and the west and suggested that communities to be empowered to be able to bring in “more place-based growth network”.

“Let’s push more powers and funding down to the community so that they can actually respond. Some of these direct income transfer schemes are a way of pushing more power directly to the people. Of course, the devil lies in the details. You have done attempts of poverty alleviation for so many decades, with very limited results. So we should experiment, carefully,” he said.

This anger, he said, is affecting the society over the absence of good middle-class jobs which tends to “have negative effects on the family, especially when you used to have those jobs and you don’t have now.”

“They are getting very angry because they are slipping on social security.”

First Published: Apr 26, 2019 10:44 IST

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