The Former Governor of the Reserve Bank of India (RBI) and the former Chief Economic Adviser to the Government of India, Raghuram Rajan has indicated that if the country needs his assistance to combat the economic stress upon us because of the novel Coronavirus, he is ready to come back.
As the entire country is under lockdown to contain the spread of the pandemic, the various sectors which face huge stress including the aviation, transport and banking sectors.
Virtually, all the businesses in the country have been shut down except the essential services.
Ranjan who currently is a faculty Finance at a prestige University in the US was asked if he would like to return to India if he was asked for assistance on the economic matters during the fight against Coronavirus, to which he said, “The answer is a straightforward yes,”
He said, “If the virus spreads, as it has spread in Italy and the United States, we have to take it very seriously. What you see in these countries is a tremendous effect on public health, the overburdening of many hospitals and many deaths and of course, when that is happening economic activity is hard to carry on,”.
The former governor of RBI said that currently, the world is “almost surely in a deep recession”. He added, “Hopefully, we will see a rebound next year, and it depends on measures we take to prevent a recurrence [of this pandemic],”.
The RBI, last month, allowed the banks to defer the EMIs by 3 months.
The aviation and other related sectors have seen massive pay cuts and even layoffs after all the fights were curbed and were asked to park all their fleets.
Today or probably by Sunday, it is expected that Prime Minister Narendra Modi will announce the fate of the lockdown, whether it will be extended or stopped.
Raghuram Rajan said, “The first sign of difficulties in India is often seem in foreign exchange. So far compared to other emerging markets our exchange rate has stayed quite stable, presumably from some support of the Reserve Bank of India. I should say we have depreciated some against the dollar, but you know countries like Brazil have gone down 25 per cent. We haven’t been in that situation,”.
Though Rajan is a well-renowned personality in the world of finance, but his idealogy differed from that of the current government led by PM Modi. He has been vocal about criticising demonitisation, and left the RBI after just 1 term as he faced heavy backlash from several segments of the government when he offered his opinions on matter which were completely unrelated to monetary policies.
Last year, in October, Rajan had said, “internal cohesion and economic growth” and not “majoritarianism” is what is needed in India to strengthen its national security.
On 9th October while addressing the audience at the OP Jindal lecture at Watson Institute, Brown University, Rajan said, “In the long run, it seems to me that internal cohesion and economic growth rather than divisive, populist majoritarianism will be India’s root to national security. So all this sort of majoritarianism may certainly for a while win elections, but it is taking India down a dark and uncertain path,”.