Former Reserve Bank governor and darling of the global liberal elite, Raghuram Rajan has come out of his hibernation once again to strike controversy. After Rajan’s doomsday predictions regarding India in the backdrop of the pandemic failed, he is now pushing the same old, stale line of ‘minorities-in-danger’ as his left counterparts. Reportedly, speaking at the Times Network India Economic Conclave, Rajan stated that an ‘anti-minority’ image for the country can lead to a loss of market for Indian products and may also result in foreign governments perceiving the nation as an unreliable partner.
The former governor said, “India enters the perception battle from a position of strength. If we are seen as a democracy treating all our citizens respectfully, and you know, a relatively poor country, we become much more sympathetic. [Consumers say] I am buying this stuff from this country which is trying to do the right thing and therefore, our markets grow.”
A former governor or for that matter any educated person with a working knowledge of economics is supposed to look at the cold, hard facts and then make an informed assessment. However, Rajan makes his assessment based on op-eds and social media chatter of left-liberal media portals.
His statements come in the backdrop of North Delhi Municipal Corporation carrying a demolition drive to raze illegal encroachment and structures in the Jahangirpuri area – the epicenter of violence against Hindus on Hanuman Janamotsav last week.
Licking the boots of West – A true sepoy trait of Rajan
Moreover, licking the boots of the West, Rajan remarked that the Indian government needed to be conscious of the West’s sensitivities. He said, “The West supports Ukraine because President Volodymyr Zelenskyy is perceived as someone who stands up for democratic ideals, whereas China suffers because of its treatment of the Uighur community and Tibetans,…”
Rajan believes that the goodwill of a country is an important factor in how other countries and their consumers perceive a market. Sure, the West appears to stand with Zelenskyy in public but in the back alleys, it is procuring more and more oil and gas from Russia.
India is in the top-10 exporter list but Rajan thinks we are not exporting
India under PM Modi has stopped giving two hoots about Western sensitivities. Although sepoys like Rajan are having a hard time digesting this new reality. Rajan is supposedly in a utopian world wearing his rose-tinted glasses, refusing to accept the facts.
And given that India has recently stormed into the list of Top 10 exporting countries in the world, used PLI schemes to kickstart its domestic manufacturing capabilities, Rajan’s statements appear to be borne out of hatred and a narrow worldview more than anything. The world is buying Indian goods but hey Mr. Rajan believes that we should take moral science classes.
Rajan mooted Islamic banking in India
In fact, Rajan has been at the forefront of minority appeasement. If he was a politician, his populist measures would have certainly yielded him a Rajya Sabha seat up until now.
As reported extensively by TFI, the idea of Islamic Banking in India was mooted by none other than Raghuram Rajan. He had called for interest-free banking techniques to be operated on a larger scale, so as to give access to those who are unable to access banking services, particularly the Muslims.
However, the RBI in 2017 decided not to pursue Rajan’s proposal of introducing Islamic banking in the country. Replying to an RTI query, the central bank said that the decision was taken after considering “the wider and equal opportunities” available to all citizens to access banking and financial services.
What is Islamic banking?
Islamic banking is a banking system in accordance with the Sharia. In Islam, money has no intrinsic value and thus it cannot be sold at a profit. Money is permitted to be used as per Sharia only.
This means, there is no concept of charging interest in Islamic banking. Even if there is, the profits are minimized. It is not clear how Islamists came to the conclusion that ‘interest-free banking’ is the way to go about in banking, but perhaps, it was to not allow big bankers or lenders to fleece the commoners.
However, those were archaic times and banks have evolved now. There is a system of checks and balances, and if Islamic banks cannot invest in bonds, T-bills, commercial paper, or lend to finance inventory or projects for interest – it defeats the entire purpose of banking. In general, Islamic banking institutions tend to be more risk-averse in their investment practices.
Modi government has made banking accessible to everyone
Rajan’s idea was based on the plank that banking is not accessible to Indians. However, since his tenure ended, much water has flown under the bridge. Banking is no longer inaccessible to the masses.
Reported extensively by TFI, the introduction of Pradhan Mantri Jan Dhan Yojana (PMJDY) has brought the rural and downtrodden population in touch with the banking sector. According to a recent report, the number of bank branches per 100,000 adults in India rose to 14.7 in 2020 from 13.6 in 2015, due to PMJDY. Moreover, mobile and internet banking transactions per 1,000 adults have increased to 13,615 in 2019 from 183 in 2015.
Raghuram Rajan and his other gaffes
At the peak of the pandemic, Rajan had espoused his verbal economic diarrhoea by remarking, “My guess is we probably will not be back to, until late next year, 2022, where we might have been, before the pandemic… It will take a little longer to go back to status quo.”
However, the Modi government through its perseverance managed to resurrect the economy which showed an immediate V-shaped recovery that too a year in advance compared to the prediction made by Rajan. When confronted for his woefully bad take, Rajan shrugged it off saying, “Create a bad enough downturn and the recovery will always be V-shaped,…”
In October last year, Rajan, not learning from his habit of making bad predictions once again stated, “As our economic performance is diminishing, our democratic credentials, our willingness to debate, to respect and tolerate differences is also taking a hit.”
However, in what can be dubbed as instant karma — the GST figures released in the next few days put Rajan in his sad, miserable place. The government reported the second-highest GST collection ever (Rs 1.30 lakh crore), pointing to robust economic recovery. Adding insult to injury, the Q2 results showed 8.4 per cent GDP growth, which further dented Rajan’s tall yet absurd claims.
Simply put, Rajan is a leftist stooge who has little to no care for numbers and data as an economist should have. He is a glorified liberal elite who makes his wages by dissing the current administration. It is high time that people stop taking him seriously, just like Rahul Gandhi.