NEW DELHI: Former RBI chief Raghuram Rajan has joined other economists in ringing the alarm bells after India posted a minus 24 per cent GDP growth in the first quarter of 2020-21.
India needs strong growth, not just to satisfy the aspirations of the youth but also to keep its unfriendly neighbours at bay. No doubt, the government and its bureaucrats are working hard as always, but they need to be “frightened out of their complacency and into meaningful activity,” Rajan wrote in a post on LinkedIn.
Making a strong case for an economic stimulus, he said that without relief, “households (will) skip meals, pull their children out of school and send them to work or beg, pledge their gold to borrow, let EMIs and rent arrears pile up…. Similarly, without relief, small and medium firms — think of a small restaurant — (will) stop paying workers, let debt pile up, or close permanently.” Former World Bank Chief Economist Kaushik Basu felt that divisiveness and lack of trust were hurting investment and job creation.
State Bank of India’s Chief Economic Adviser Soumya Kanti Ghosh has said the loss of Rs 40-50 lakh crore of the GDP in one quarter could not be recovered by any amount of fiscal or monetary support.