'2023 Will Be A Difficult Year For Indian Economy' Predicts Former RBI Governor Raghuram Rajan

Raghuram Rajan, who has previously served as the IMF¡¯s Chief Economist and also as the Governor of the Reserve Bank of India before he stepped down from the latter post just a few months before 2016's demonetization move, has warned about a difficult 2023.

"2023 Is Going To Be Difficult"

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On India's economic condition, he said that next year is going to be difficult, adding that growth is going to be slow in the world and India is also going to be hit.

"Exports are slowing a bit. India's inflation problem is more commodity inflation problem and that is also going to be negative for growth," he said, as per a PTI report.

Rajan, who had joined Rahul Gandhi's Bharat Jodo Yatra this week, said that the next year will be difficult for the Indian economy as also for the rest of the world. He also said that India failed to "generate reforms" needed for growth.

The ex RBI governor said policies should be formulated keeping in mind the lower middle class, which suffered the most due to the coronavirus pandemic. Rajan also pitched for creating a conducive environment for small and medium-scale industries and giving a push to a green revolution in the field of sustainable energy.

India¡¯s Next Revolution

In a conversation with Gandhi, Rajan suggested that the next revolution in the country could be in the service sector.

¡°We can work for the US from here without going to America¡­ like doctors can provide telemedicine services to the US and can earn a lot of foreign exchanges. Our service export will make us a superpower in export,¡± he said.

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Secondly, Raghuram Rajan said, a new kind of green revolution is there.

¡°If we push on that, we can be at the forefront in building windmills, making our buildings green. Most damage from climate change will be in South Asia. You have already seen Bangladesh and Pakistan suffer. India is not far behind. We occupy the same territory. So, we have to push very hard,¡± the ex RBI governor said.

¡°We can make windmills, solar, we have huge demand. But we can also innovate and I think there are lots of possibilities, we should be forward-thinking,¡± he said.

Also Read: 6 Years Since Demonetization, Cash With Public Jumps Over 70%

Covid Impact On Poor

Rajan said that the income of the upper middle class increased because they could work from home during the COVID-19 pandemic, but those who worked in factories lost their earnings.

¡°So this divide increased in the pandemic. Rich had no problem, the lower class got ration and other things but the lower middle class had a big damage. There were no jobs, unemployment increased,¡± he said.

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He suggested that policymakers consider this class, adding that the pandemic was part of the problem and that the economy was slowing before the pandemic. "We have not really generated reforms which will generate growth," he added.

Rajan said that unemployment is a major problem and the private sector has to be pushed because all cannot get government jobs. He said that jobs can be generated in the agriculture sector if technological intervention is increased.

The former Chief Economist at the IMF also suggested that a conducive environment and factors are needed for small and medium-scale industries to grow. On investment in the stock market by people who are less informed, Rajan said that consumer protection should be there so that they can know their rights.

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