Former Reserve Bank Governor Raghuram Rajan said India will still remain a lower middle country if the potential growth rate remains at 6 per cent annually without any rise in population by 2047 (Amrit Kaal) and will be reaching the end of the demographic dividend by then. Speaking at a programme organised by Manthanon on Saturday, the economist said if the country does not grow faster, it will grow older (demographically) before it gets richer, which means there is the burden of an aging population to deal with also at that point. Rajan said the GDP growth in India for the past two quarters was in the region of 7.5 per cent and if one looks at the labor force participation, it is very low and when it comes to female participation, "it is the lowest in the G20".
Graphic representation of lending rate cut by RBI.
The meeting, which comes just days before the next bi-monthly monetary policy review on June 3, lasted for about 50 minutes.
On Aug 11, the Chinese central bank surprised markets by devaluing the yuan by nearly 2 per cent.
By March 28, the reserves rose by a whopping $5.038 billion to $303.673 billion, the second highest in the fiscal.
Rajan spoke at the Delhi Economic Conclave 2013 on 'The Agenda for the Next Five Years' in New Delhi.
Captains of the industry, including Adi Godrej and Anil Ambani, were among the early birds from India Inc to cast their votes in the financial capital.
Foreign brokerage HSBC said emergence of pleasing data and the likelihood of RBI holding its key rate on April 1, should not lead to believing that the rate tightening cycle is over.
Rajan rules out picking unconventional tools to tame inflation
Reserve Bank Governor Raghuram Rajan on Tuesday again surprised the markets and raised the key policy rate by 0.25 per cent to 8 per cent in a bid to curb inflation, a move that may translate into higher EMIs and push up the cost of borrowing for corporates.
Raghuram Rajan says he's not beholden to the Finance Ministry nor does he go around with the fear of being fired.
All eyes are on new Reserve Bank Governor Raghuram Rajan who will come out with his maiden monetary policy review on Friday amid conflicting demands for rate cut and an urgent need to contain inflation which soared to 6-month high of 6.1 per cent in August.
RBI Governor Raghuram Rajan will also participate in the meet.
Reserve Bank Governor Raghuram Rajan expressed confidence in India's growth and said the country is on target to meet Jan inflation target of below 6%.
Amid concerns over minorities being targeted in India, former Reserve Bank governor Raghuram Rajan on Thursday cautioned that an 'anti-minority' image for the country can lead to loss of market for Indian products and may also result in foreign governments perceiving the nation as an unreliable partner. India enters the perception battle from a position of strength, the professor at Chicago's Booth School of Business said, alluding to credentials like democracy and secularism, but warned that this battle is "ours to lose". The comments came a day after bulldozers tore down several concrete and temporary structures close to a mosque in Jahangirpuri as part of an anti-encroachment drive, days after the northwest Delhi neighbourhood was rocked by communal violence.
The bank's base rate currently stands at 10 per cent and the last movement in it was in November last year, when it was hiked by 0.20 per cent.
The Indian economy recovered from the Covid-induced downturn during 2022 and is poised for further improvement in the coming quarters though downside risks emanating from geopolitical tensions, strengthening dollar and elevated inflation will continue. The positive trajectory in the growth trend and improved fundamentals will help the nation in neutralising the impact of global headwinds which are expected to have a bearing on the country's exports in the months to come. The challenges before the government and the Reserve Bank in the new year would be to arrest inflation, check declining value of rupee against US dollar and promote private investment and growth, with a view to ensure that the country remains one the fastest growing major economies of the world.
Of the seven members, four are proposed to be government nominees and the rest from RBI.
Retail inflation was at a 25-month low of 8.1 per cent in February.
RBI governor advises students to not take advantage of economic freedom
RBI Governor Raghuram Rajan stressed that trade, immigration and capital flows must not be hindered.
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The Reserve Bank released a report on 'Banking Structure in India -- The Way Forward' in August 2013, which covered issues such as consolidation of large-sized banks with a view to have a few global-sized banks and the desirability and practicality of having small, localised banks as preferred vehicles for financial inclusion.
"Finance Ministry and RBI keep talking all the time," Rajan said.
Gross non-performing assets of public sector banks have gone up.
In January 2003, the American Finance Association awarded Rajan the inaugural Fischer Black Prize for the best finance researcher under the age of 40.
The local currency had gained 10 paise to close at 63.51.
The mismatch between industrialists' demand and account holders is because of inflation, Rajan said.
The step followed Reserve Bank Governor Raghuram Rajan's hard talk.
Sounding a note of caution, former Reserve Bank Governor Raghuram Rajan has said that India is "dangerously close" to the Hindu rate of growth in view of subdued private sector investment, high interest rates and slowing global growth. Rajan said that sequential slowdown in the quarterly growth, as revealed by the latest estimate of national income released by the National Statistical Office (NSO) last month, was worrying. Hindu rate of growth is a term describing low Indian economic growth rates from the 1950s to the 1980s, which averaged around 4 per cent.
India on Saturday favoured greater mobility of skilled labour
The solution to this problem lies only in making the system more efficient, he said.
In the past, there have been instances of people getting fake e-mails in the name of RBI.
Rajan has set March 2017 as the deadline for banks to clean up their balance sheets.
ICICI Bank and HDFC Bank have effected a cut of up to 0.50 per cent in term deposit rates following tepid credit growth and ease in money market rates.
Jaitley said if interest rates were lowered, the economy could grow faster than 7-7.5 per cent.
Increased demand for the dollar weighed on the local currency.
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On the Congress accusing BJP of hypocrisy for its failure to disclose names, Jaitley said the Congress got it all wrong because media "completely misreported" the case.
Polling for the 288-seat Assembly is being held in a single-phase on Wednesday.
Raghuram Rajan has described the fall in reserves as dip in valuation with appreciation of dollar against other currencies
Rajan said there will be some volatility, but once the initial bout or wave abates, people will look for good fundamentals
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