Raghuram Rajan has a piece of advice before he steps down as Reserve Bank of India (RBI) Governor on September 4. For the way ahead, he says that the Indian economy needs to move ahead step by step by way of mini reforms in not one but all dimensions.
“Mini-bang reforms is the way forward. We need to move step by step. We need to move step by step, if we move too fast on one dimension, we will be out-run on other dimensions,” Rajan said on Friday in an interview to India Today news channel.
It’s better to build systems which are capable of coping with reforms, he added.
Commending the way the Indian economy was growing, Rajan said: “Economy is doing reasonably good. Sensex is doing very well. Markets are unaffected by beef ban row. India is a noisy economy and investors have accepted us that way.”
“Once we have a good monsoon, a feel good factor prevails in the market,” he said.
Rajan, however, also observed that the private investment and job creation in formal sector needs to pick up for growth of the economy.
Refusing to be drawn into controversy on whether the decision to scrap the Planning Commission was justified, he said: “We need a certain amount of looking ahead, whether it is Planning Commission or NITI Aayog.”
On being asked what should be the expected Goods and Services Tax (GST) rate, he steered clear saying: “No view on GST rate as it is a fiscal policy issue.”