Rajan said that India grew too fast in 2010-11 and paid the price of high inflation
RBI governor Raghuram Rajan (File Photo)
Mumbai: RBI Governor Raghuram Rajan gave no indication on what he may do in the September 26 credit policy and asked his audience to take hints from the guidance in his last policy.
Speaking at the fourth C.K. Prahalad Memorial Lecture in Mumbai on Friday organised by Aspen and CII, he said that the guidance talked of global uncertainties being resolved, likely persistence of recent inflationary pressures, the full monsoon outturn, as well as possible Federal Reserve actions and transmission of earlier rate cuts by banks.
He said that India should take a lesson from Brazil once applauded for its growth rate of 7.10 per cent will now see just 3 per cent growth and its debt rating has been reduced to junk.
It was pushed to the brink by extravagant stimulus measures and low interest rates. Admitting that India was a sea of calm in a world of turmoil, he wondered how long it would last. He said that India grew too fast in 2010-11 and paid the price of high inflation.
He said that India’s sustainable growth potential will be spurred more by continuous reforms which will strengthen the business environment, expand access to financing and allow companies to exploit their core competencies.
He depreciated the concept of juggad, the Indian tendency to cope with difficult situation by “working around” difficulties by hook or by crook and said it encourages an attitude of short cuts and evasions.
( Source : deccan chronicle )
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