Raghuram Rajan, a former governor of the Reserve Bank of India (RBI), joined Rahul Gandhi's Bharat Jodo Yatra on Wednesday and predicted that the global and Indian economies will both face challenges in the next year. In a chat with Rahul Gandhi, Rajan stated that because of rising key interest rates and slowing exports, the Indian economy will find it difficult to develop at a 5% rate in 2019.
"We would be lucky if we do (grow at) 5% next year. See the problem with the growth numbers is that you have to understand what you are measuring with respect to. If you had a terrible quarter last year and you are measuring with respect to, you look very good," Rajan said.
"So ideally what you is look before the pandemic, in 2019, and look at now. And if you look at 2022 vis-a-vis, it's about 2% a year. That's too low for us."
Further in the video, the former head of the RBI said that the Covid-19 outbreak was "part of the problem" and that India had been "slowing before the pandemic". According to him, the nation failed to "create reforms" necessary for expansion.
Regarding the difficulties of rising economic inequality, Raghuram Rajan claimed that while individuals in the upper middle class had a boost in income due to the ability to work from home during the COVID-19 epidemic, others who were employed in factories saw a decrease in pay.
"So, this divide increased during 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.
(If you have a story in and around Mumbai, you have our ears, be a citizen journalist and send us your story here. )