Raghuram Rajan told a private news channel on being asked if he would return to
India if his expertise was required for a strategy against the pandemic.
Rajan, 57, who was the RBI governor for three years until September 2016, is currently working as a professor at the prestigious University of Chicago. In an interview to NDTV, Rajan said he would readily agree if he’s asked to provide assistance in dealing with the economic stress caused by Covid-19, which has claimed over 200 lives in the country so far. Rajan is already part of a 11-member external advisory group set up by the IMF to provide perspectives from around the globe on key developments and policy issues, including responses to the exceptional challenges the world faces now from the rogue virus.
Rajan said the world is “almost surely in a deep recession”, adding that he expected to see a rebound next year. “The first sign of difficulties in India is often seen in foreign exchange. So far compared to other emerging markets our exchange rate has stayed quite stable, presumably from some support of the RBI. I should say we have depreciated some against the dollar, but you know countries like Brazil have gone down 25 per cent. We haven’t been in that situation,” he said.
Rajan has suggested to the Indian government to call people with proven expertise and capabilities, including from opposition parties, to deal with perhaps the greatest emergency being faced by the country since Independence following the outbreak.
He also cautioned that driving everything from the Prime Minister’s Office, with the same overworked people, may not be of much help. “There is much to do. The government should call on people with proven expertise and capabilities, of whom there are so many in India, to help it manage its response. It may even want to reach across the political aisle to draw in members of the opposition who have had experience in previous times of great stress like the global financial crisis.
“If, however, the government insists on driving everything from the Prime Minister’s Office, with the same overworked people, it will do too little, too late,” Rajan said in a blog titled “Perhaps India’s Greatest Challenge in Recent Times”.
He said economically, India is probably facing its greatest emergency since Independence.
“The global financial crisis in 2008-09 was a massive demand shock, but our workers could still go to work, our firms were coming off years of strong growth, our financial system was largely sound and our government finances were healthy. “None of this is true today as we fight the coronavirus pandemic,” Rajan noted.
He, however, asserted that with the right resolve and priorities, and drawing on India’s many sources of strength, it can beat this virus back, and even set the stage for a much more hopeful tomorrow.