Raghuram Rajan says RBI had warned Modi govt against demonetisation- On Sunday, Raghuram Rajan has disclosed in his latest book “I do what I do” that RBI had warned PM Narendra Modi Government against demonetization. It was the time to launch his book. He has written it in his book. Former RBI governor has authored the book on his stint.
His book is a collection of essays, speeches and gained experiences during his tenure as RBI’s 23rd Governor. In his book, Mr. Raghuram Rajan explained economic concepts, his efforts to stabilize a failed market on different measures. Speculators saw crisis and India labeled among one of the Fragile Five economies. He also expressed his views on issues of tolerance, the connection between political freedom and prosperity.
Former RBI governor Raghuram Rajan has revealed that he did not favour demonetisation as he felt the short term economic costs associated with such a disruptive decision would outweigh any longer term benefits from it. Although he maintains the book is not a tell-all.
Rajan has said “At no point during my term was the RBI asked to make a decision on demonetization.” It was expected that Prime Minister Narendra Modi would shortly announce to scrap the high-value banknotes. But its preparation was underway many months before November 8.
Former RBI governor has spoken on demonetisation for first time since left the office on September 3 last year. Currently RaghuRam Rajan is teaching economics at University of Chicago. He said, he chose not to speak on demonetization because he didn’t want to intrude on his successor’s initial engagement.
However, Government has asked from me in February 2016 for my view on demonetization. And I gave orally. He also wrote “Although there might be long-term benefits, I felt the likely short-term economic costs would outweigh them.”
He didn’t explained short-term costs over long-term benefits. But as RBI Governor he “felt there were alternatives to achieve the main goals.”