Accelerate economic growth to increase job availability and avoid ‘social mischief’: Raghuram Rajan to India

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Raghuram Rajan is in India to promote his new book ‘I Do What I Do’ and spoke to media in New Delhi.

Raghuram Rajan. Credit: Press Information Bureau.

The former governor of the Reserve Bank of India (RBI) Raghuram Rajan said on Thursday that India needs to propel its economy soon to provide work to the country’s unemployed.

India’s economy has seen a sudden decline to 5.7 percent and Rajan said the country should maintain 8 percent to 9 percent growth. Rajan added that a boost in private investment and rejuvenation of exports will help India grow.

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“Remember that we have what we call the population dividend. A million new people entering the labor force every month,” Rajan said, Bloomberg reported. “If we don’t provide these jobs that are required, you have a million dissatisfied entrants. And that could create a lot of social mischief.”

Talking to NDTV, Rajan said that he was open continue as RBI’s governor but there were some disagreements with the government. “I had a three-year term and the term came to an end. If there had to be an extension, there had to be an agreement with the government but there wasn’t.  The government did not offer me a new contract and that’s where it ended,” he said.

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On demonetization, Rajan said that lack of preparation will always lead to an unfavorable impact on the economy. Rajan said, “If you’re not prepared on Day 1 with all the currency that’s being replaced – currency is important for economic activity – you will have a chilling of economic activity. You would see a dramatic slowdown of economic activity.”

Rajan also commented on the murder of veteran Indian journalist Gauri Lankesh, who was killed on Tuesday.

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“The lady journalist‘s killing has become an issue because people are concluding that it was because of what she was writing. I think it’s early days to conclude anything. I think we should let the investigation happen and until we have more information it would be premature to jump to any kind of conclusion,” he said, Livemint reported.