Bhopal: Data on unemployment is not very accurate, says Ex-RBI deputy governor Shyamala Gopinath

The former deputy governor of Reserve Bank of India and former chairperson of the HDFC Bank, Shyamala Gopinath, who was in the city to participate in a G20 conclave, , talked with the Free Press about the state of the Indian economy, its recovery from Covid impact, $5-trillion economy and demonetization.

SmitaUpdated: Monday, January 16, 2023, 10:57 PM IST
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Shyamala Gopinath |

Bhopal(Madhya Pradesh): “…In India, we all want a government job and those who fail to get it, feel that they are unemployed,” said former deputy governor of Reserve Bank of India and former chairperson of the HDFC Bank, Shyamala Gopinath stating that figures of unemployment and inflation went up post-pandemic. The 74-year-old Gopinath, who was in the city to participate in a G20 conclave on Monday, talked with the Free Press about the state of the Indian economy, its recovery from Covid impact, $ 5-trillion economy and demonetization. 

Excerpts:

How did the Covid-19 pandemic impact the Indian economy?

The impact was very wide and very deep. But the most severely hit were contact-intensive sectors like tourism, hotel, entertainment, travel and so on. The MSME sector was also hit. But only the pandemic was not responsible for that. A host of other factors were also in play. 

Is the economy on the recovery path?

Definitely. The fact that our GDP growth rate is the highest in the world shows it. The contact intensive-sector is recovering fast. Air travel is up. The entertainment industry is also growing. In fact, in some sectors, the industry has surpassed the pre-Covid levels. The informal sector is yet to recover. And yes, the losses incurred during the pandemic period are yet to be made up.

What can the government do to quicken the pace of recovery?

Policy stability is very essential. Too many and too frequent policy changes should be avoided. The fiscal policy should be conducive to growth. Infrastructure should be developed. People should be able to get their routine work done without hassle.

Do you think India can become a $5-trillion economy?

I don’t know whether it is achievable or whether it will be achieved. But at least aspiration is there. Once you have identified a goal, you can work towards it. Sometimes the journey is more important than the destination.

Your take on unemployment and inflation in India?

Yes, post-pandemic, unemployment and inflation have grown. But the data on unemployment is not very accurate. The thing is that in India, we all want a government job and those who don’t get it, feel that they are unemployed. 

The Supreme Court has validated the demonetisation of certain high-value currency notes by the GoI. Do you think DeMo was the right decision?

The decision was taken due to certain reasons, which were mentioned. But let us look at the positive side of things. DeMo spurred digitalisation of the economy. Today, every company has to be tech-savvy. People have become tech savvy. Contactless transactions have shot through the roof.  On the other hand, people did suffer in the process of getting old currency notes exchanged. But I think that the people at large understood the reasons behind DeMo. There was no popular resentment or anger against the decision.    

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