In a recent podcast titled ‘Raghuram Rajan’s Economic Roadmap & Warning for India,’ former Reserve Bank of India (RBI) Governor, Raghuram Rajan, delved into a nuanced discussion about India’s economic trajectory, pointing to key areas of progress and potential pitfalls.
Rajan spotlighted the economic vibrancy of cities like Gurgaon and Noida, characterizing them as operating within a framework akin to first-world economies. This insight underlines the regional variations in India’s economic landscape, challenging traditional perceptions.
The podcast also featured Rajan’s commendation of the Unified Payments Interface (UPI), a success story that he claimed a part in shaping during his tenure at the RBI. With the UPI handling an impressive 10 billion transactions monthly, Rajan acknowledged its pivotal role in India’s digital financial evolution.
However, amid these successes, Rajan expressed skepticism about India’s trajectory to becoming a developed economy by 2047. Citing the current growth rate, he cautioned that India, with a per capita income of $2,500, might reach a $10,000 per capita economy by 2047, still trailing China by $3,000. This prognosis implies the possibility of India attaining a lower or moderate middle-income status, emphasizing the need for recalibration in economic strategies.
The discussion expanded to India’s ambitious goal of achieving a $5 trillion economy by 2047. Rajan urged a realistic assessment of this target, emphasizing the imperative to surpass the current growth rate for substantial progress.
Rajan also provided intriguing insights into India’s policy decisions during his tenure, disclosing details about the examination of demonetization’s feasibility. Despite being asked by the Prime Minister’s Office, his team advised against it, showcasing the thoughtful consideration of potential outcomes.
The conversation took a turn towards addressing social issues as well. Rajan openly discussed malnutrition, urging the country to confront it openly and adopt a mission-mode approach to eradicate it within the next five years. Drawing attention to regional disparities, he highlighted the importance of learning from high-performing regions, exemplifying Kerala’s 6 percent malnutrition rate compared to areas in Bihar and Jharkhand with rates exceeding 35 percent.
In essence, Raghuram Rajan’s insights provided a multifaceted view of India’s economic landscape, challenging policymakers to navigate wisely through both opportunities and challenges for sustained and inclusive growth.