Reforms are likely to be put on hold till the next general elections that are scheduled in early 2019, predicted former RBI Governor Raghuram Rajan, but added that India will move up to a “higher plane of growth” thereafter.
On employment generation, Rajan reportedly said that India’s 7.5 per cent growth will not be able create good jobs for the 12 million people coming into the labour market every year.
“I think to some extent, reforms will be put on the shelf till the next election. But post-election, if we can accelerate this pace of reform, there’s no reason why in two or three years we couldn’t move up to a higher plane of growth,” CNBC quoted him as saying in an interview.
Rajan, who is currently a professor of finance at the University of Chicago Booth School of Business, said India can move up from the 7.5 per cent growth, which is not enough to employ the 12 million people coming to the labour force every year in good jobs.
“We can move up to maybe 10 per cent, provide some kind of source of demand for the work. We can do that but I think we need to work on it,” a PTI report quoted him as saying.
Rajan reportedly said that reforms are happening in India but more slowly than one would wish. “That’s potentially the cost of getting political agreement,” he was quoted as saying.
Warning about the global attitude that is less receptive to exports, Rajan said,” So if India becomes a manufacturing giant overnight, who’s going to buy its stuff? So, India needs to think about its pathway of growth, it will be different from China’s.”
