Mumbai: Raghuram Rajan, Governor, Reserve Bank of India today underscored the economic problems of the recent past and said they arose because India outgrew its institutions. The Government and the Reserve Bank are both taking measures to restore sustainable growth by building the necessary institutions.
The RBI Governor was addressing FIBAC 2015 today. This is the 14th edition of FIBAC organised by FICCI and Indian Banks’ Association (IBA). This year’s 2-day forum that began today will deliberate on most exciting innovations and developments in banking technology and digital world and how these can be leveraged to promote India’s ambitious inclusive growth agenda.
In his speech Rajan focused on India’s efforts to regain its place in the ranks of prosperous nations. We must remember that what sets poor nations apart from the rich is not people or resources or even luck but good governance, which comes from strong frameworks and strong institutions, emphasised Rajan adding his focus is on the challenges in ensuring sustainable growth does not detract from the tremendous progress the country has made. There is much to be optimistic about, including the massive investments that are starting in infrastructure, the tremendous sweep of information technology across every facet of Indian life, and the radical changes that are taking place in the financial sector, he pointed out.
Rajan pointed out that the Indian economy is full of possibilities, even as much of the world is mired in pessimism. In this context, he went on to state: ” I have been arguing that the fragility of the world economy is precisely because it has focused on quick fixes rather than deep reform.”
The RBI Governor said: “we should not delude ourselves into thinking our work is done, or postpone hard choices to a seemingly easier tomorrow. The question for us as a society is whether we have the discipline to do what is necessary at a time when global conditions are propitious – commodity prices look like they will stay low for a time, helping the fight against inflation, and there is plenty of money around the world and at home, looking for investments, including in distressed assets, that can help us clean bank and corporate balance sheets.”