- Rajne said, there are always dark spots with bright spots in the economy
- All possible measures need to be taken to prevent ‘K’ shaped recovery.
- Worldwide ‘inflation’ a matter of concern, India cannot be an exception
New Delhi. Former Reserve Bank governor Raghuram Rajan has said that the Indian economy has ‘bright spots as well as dark spots’, so the government needs to ‘target’ its spending carefully so that fiscal deficit remains high. to be prevented from reaching.
The eminent economist said that the government needs to take more measures to halt the revival of the ‘K’ shape of the economy. In general, technology and large capital firms in a K-shaped revival tend to improve faster than small businesses and industries most affected by the pandemic. Rajan said, my biggest concern regarding the economy is about the middle class, small and medium sector and our children. All these things will come into effect after the initial revival from suppressed demand.
The demand for consumer goods is very weak
The ‘symptom’ of all these is weak consumer demand, he said. The demand for consumer goods, especially on a large scale, is quite weak. Rajan is currently a professor at the Booth School of Business at the University of Chicago. There are always dark spots with bright spots in the economy, he said. He said that if we talk about the bright areas, then healthcare companies come in it. Apart from these, Information Technology (IT) and IT-allied sectors are doing tremendous business. Unicorns (valued at over $1 billion) have been formed in several sectors and some segments of the financial sector are also strong. The former RBI governor said, talking about the dark spots, unemployment, low purchasing power (especially in the lower middle class), financial pressure of small and medium-sized companies comes in this. Also in the dark spots come the sluggish growth of credit and the education of our schools.
K-shape recovery needed to stop
Rajan said the novel coronavirus outbreak is a setback for both Omicron medical and economic activity, but at the same time cautioned the government against a K-shaped revival. Rajan said that we should take all possible measures to stop the revival of ‘K’ shape. The Indian economy is expected to grow at 9 percent in the current financial year. The Indian economy had contracted by 7.3 percent in the last financial year. The Union Budget for the financial year 2022-23 will be presented on February 1. Before the budget, Rajan said that a budget document is a ‘viewpoint’.
need to think long term
“I want to see the vision of India for five or 10 years,” he said. Asked whether the government should take steps for fiscal consolidation or continue with the stimulus measures, Rajan said India’s fiscal position was not good even till the pandemic struck. This is the reason why the Finance Minister can no longer spend with open arms. He said that the government should spend where it is needed. But we need to spend carefully, so that the fiscal deficit does not reach too high. On inflation, Rajan said that today ‘inflation’ is a matter of concern for all the countries of the world and India cannot be an exception.
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