Economy was neglected at the cost of social and political agenda: Raghuram Rajan

Ex-Governor of Reserve Bank of India (RBI) Dr. Raghuram Rajan lashed out at the Modi government saying “Unfortunately the current government, post a massive election win has focussed more on fulfilling its political and social agenda rather than paying attention on the economics."

Hyderabad:Narendra Modi government at the Centre has focused more on its social and political agenda rather than paying attention to the economics said ex-Governor of Reserve Bank of India (RBI) Dr. Raghuram Rajan.

In an interview to a news agency, the economist lashed out at the Modi Government saying “Unfortunately the current government, post a massive election win has focused more on fulfilling its political and social agenda rather than paying attention on the economics."

Rajan also pointed out that the government has not focused on cleaning up the financial sector.

"And unfortunately this drift has continued a pace of slowing growth which was precipitated initially by some actions the government took such as the demonetisation and a poorly rolled out Goods and Services Tax (GST) reform but it has also not paid sufficient attention to cleaning up the financial sector and unfortunately that is leading to a slowing growth," he added.

Raghuram Rajan who was also the former Chief Economist at the International Monetary Fund suggested that if attention is paid to them and the appropriate actions are taken the situation can be changed.

"Now these are the things that can change if attention is paid to them and the appropriate actions are taken."

He also pointed out at the limited capacity of the financial institutions to lend which are again responsible for the slower economic growth of the country.

"I think the central issue in India today is really financial institutions who have limited capacity to lend either because they have too little capital as it is the case with some state-owned financial institutions or they are in some degree of distress as is true of some of the non-bank financial companies" said Rajan.