This Article is From Dec 17, 2018

"It Was A Bad Idea": Raghuram Rajan To NDTV On Demonetisation

Raghuram Rajan tells NDTV that agrarian distress, power and banks are the main problems in India.

"I was asked about demonetisation, I said it is a bad idea," Raghuram Rajan said


  • Raghuram Rajan said lack of jobs in India a serious issue
  • He said India suffered because of notes ban, GST
  • India needs agriculture as a growth engine, Mr Rajan said
New Delhi: Raghuram Rajan, the former Governor of the Reserve Bank of India, says the lack of jobs in India is a very serious issue. In an exclusive interview with NDTV's Prannoy Roy, Mr Rajan cites the example of how 2.5 crore people in the country applied for 90,000 Railway jobs. Calling demonetisation a bad idea, Mr Rajan said India suffered because of it as well as Goods and Services Tax or GST.

Following are the top 10 quotes from Raghuram Rajan's interview:

  1. Not just foreign but even for domestic investors there has to be confidence there has to be a sense that the rule of law is upheld and to extent India is very well positioned for growth so we should be protecting institutions because we will need them.

  2. Agrarian distress is a huge problem. This, power and banks are the main problems. Need agriculture as a growth engine. 

  3. Lack of jobs is a very serious issue. This reflects the problems that even at 7 per cent growth, it is not producing the jobs. 25 million people applying for 90,000 railway jobs - that seems to me a reflection of the fact that we have a real job problem. 

  4. Lack of women participation in economy is very worrisome. We're not creating opportunities for women.

  5. When I was governor, we paid the highest dividend to the government. But that isn't the issue any more. The government's doesn't just want the profit, it wants the excess.

  6. (On the revision of GDP growth figures) We need an independent body of experts, Indian and international, to examine the methodology as it is important to maintain the credibility of our statistics. 

  7. There were early warning signs on the financial crisis in IL&FS which should have been heeded.

  8. (On fraud list given to Prime Minister's Office) There was a list of frauds. For example a jeweller, without taking any names, takes Rs 4,000 crore loan from banks and then suddenly announces his buyers on the other side have defaulted. It turns out the buyers on the other side was a company owned by him. Then tracking the fraud takes a long time.

  9. (On majoritarianism affecting India) And the natural category is Hindu majoritarianism and then there is the excluded from the Hindu majoritarianism, which is minorities - Christians and Muslims - and the danger of course in this kind of majoritarianism is that rather than uniting one set, it is essentially divides the country into a big warring pieces.

  10. I was asked about demonetisation, I said it was a bad idea. (GST) is a good idea in the longer term but it had a short term teething effect... India suffered because of GST and demonetisation. Just as the world economy was growing, the Indian economy growth slowed because of the implementation of both GST and demonetisation.