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Former RBI governor Raghuram Rajan has said slowdown in growth is due to the current government focussing more on meeting its political and social agenda rather than paying attention to the economy.
India can still reverse its slowing economic growth by paying attention to key issues, he said.
“It’s a sad story, I think most recently, it is politics,” Rajan said in response to a question on what was stopping India’s growth which remains below potential.
In an interview to Bloomberg TV, Rajan said unfortunately the current government after a massive election win has “focussed more on fulfilling its political and social agenda rather than paying attention to the economic growth”.
“Unfortunately, this drift has continued a pace of slowing growth, which was precipitated initially by some actions the government took such as the demonetisation and a poorly rolled out Goods and Services Tax (GST) reform,” Rajan said.
India’s GDP growth hit nearly 7-year low of 4.7 per cent in the December quarter, as per official data released on Friday.
The GDP growth for the quarter is the lowest since January-March of 2012-13.
In the interview, which was telecast before the official numbers were released, Rajan said India has not paid sufficient attention to cleaning up the financial sector and unfortunately, that is leading to the slowing growth.
“These are things that they can change if attention is paid to them and appropriate actions are taken,” Rajan, Professor of Finance at University of Chicago Booth School of Business, said.
