Questioning the style of function in the National Democratic Alliance (NDA) regime with the Prime Minister’s Office (PMO) dominating the decision-making process, former Reserve Bank of India Governor Raghuram Rajan said the Indian economy would be a shadow of its former self if the government didn’t announce further measures.
Former Reserve Bank of India governor Raghuram Rajan questioned state governments that sought to suspend labour laws without wider consultations and micro-management by the Centre to force states to undertake the reforms. He advised the government to not bow under the pressure of rating agencies.
He said payment of dues to the micro, small and medium enterprises (MSMEs) would be a better response to the sector’s woes.
The former RBI governor said while the US-style bailouts were not possible in India, airlines were nonetheless bleeding and the government must offer them debt relief.
Rajan said the financial sector has been in deep distress for a long time before the crisis struck. It needs re-structuring, re-capitalisation and the hole in the leaking bucket must be plugged, he said. Rajan explicitly called for better management of public sector banks.
Rajan added that the proposed agricultural reforms could be watered down by bureaucrats.