Saturday, 13 December 2014

RBI Governor Raghuram Rajan does not support Make in India


RBI Governor Raghuram Rajan does not support Make in India

13 December, 2014, IndiaUSA NEWS CORP

Governor Raghuram Rajan's remarks do not tune with Modi Government. May be it is reflection of previous government's influence.  Governor Raghuram Rajan addressed India's top corporates on issues confronting the domestic and global economies. His speech guns government, as well as India Inc. for a rate cut in view of the sharp slowdown in inflation. Boosting markets not the regulator's job: RBI Governor stood his ground on interest rates and said central bankers have to go against popular opinion. he said, The role of a regulator is not to boost Sensex. Higher Sensex can at best be a collateral benefit not a primary objective. The underlying growth is more important. No trade off between inflation and growth: Dr Rajan said central bank focused on containing inflation will ensure best conditions for sustainable growth. Make for India is also important for "Make in India" to succeed, the government needs to implement ambitious infrastructure plans and reduce the cost of doing business in India. But "Make for India" is equally important because external demand is weak. India does not need to go out of the way to get foreign investors. If we make it easier for young companies to do business in India, it will create a transparent and quick system and will do the same for foreign investors. Noting that the government has indicated that it will stick to the fiscal consolidation path, the RBI governor proposed a debate on whether India needed more institutions to ensure deficits stay within control and the quality of budgets is high. Mr.Rajan's caution is worth noting since manufacturing in India without any market development strategy would prove many start-up industries struggling to survive and leave with ghost industrial structures rusting in the sun. It is better to develop internal secure market putting more spending money in the hands of the public and make sure countries like China do not dump their unsold goods into Indian market,. Money invested in converting waste into wealth will be the way to promote industries. Domestic savings shall definitely boost our economy but it should not impact consumer spending. Proper blending of domestic savings and consumer spending should be encouraged to spur growth.

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