Raghuram Rajan: Gurugram and Noida Function as First-World Economies

By Consultants Review Team Saturday, 16 December 2023

During a podcast titled 'Raghuram Rajan's Economic Roadmap & Warning for India' on Youtuber Akash Banerjee's Deshbhakt channel, former Reserve Bank of India (RBI) Governor Raghuram Rajan gave insights on India's economic accomplishments and problems. Rajan emphasized economic activities in places such as Gurgaon and Noida, claiming that residents there operate inside a framework resembling a first-world economy. "A portion of the Indian economy is first-world. "People in Noida or Gurgaon are essentially living in a first-world economy," he explained.

UPI Receives Praise

Rajan, who previously served as the government's Chief Economic Advisor (2012-2013), praised the impact of the Unified Payments Interface (UPI) and acknowledged its development during his time at the RBI. He acknowledged its rapid expansion. "UPI. A huge success. There are many fathers to success. I'd like to have a taste of fatherhood. It began during my tenure at the RBI, and we are presently at 10 billion transactions each month," Rajan added.

Growth Prospects and Obstacles 

Rajan expressed reservations about India's path to becoming a developed economy by 2047, suggesting that the present growth pace could stymie this progress.

With India's per capita income currently about $2,500, he predicted that the country might reach a $10,000 per capita GDP by 2047. However, he emphasized that India would still lag behind China by $3,000, perhaps relegating it to a lower or moderate middle-income category rather than a developed one.

"Our current per capita income is about $2,500." At the present rate of growth, India would not be a developed country by 2047. We can only hope to reach lower to moderate middle-income levels. Given our growth, India will reach a $10,000 per capita economy by 2047, trailing China by $3,000," Rajan stated. He also stated that in order to achieve its objectives, India would have to "skip the processes" that other countries had utilized.

This comes after Union Minister of State for Finance Pankaj Chaudhary stated that India's objective is to become a $5 trillion economy and an advanced economy by 2047. Chaudhary stated that he sees this milestone connecting with 'Amrit Kaal' and highlighted that India's GDP would exceed $3.7 trillion by fiscal year 2022-23.

Perspectives on Demonetization and Malnutrition

Regarding demonetization, Rajan stated that they were requested to investigate its viability. He said that the prime minister's office had asked the RBI to "examine whether demonetization would work or not," and that Rajan's team had responded with a memo outlining the benefits and drawbacks. However, he determined that the action should be avoided. Furthermore, Rajan stressed the importance of confronting malnutrition "openly" and working to abolish it within the next five years.

"I believe we have recognized as a country that we are doing poorly in terms of malnutrition, but it is being swept under the rug as something shameful." We should exhale at something heinous and attack it on a mission-mode level, saying, "Measure us, every year we are going to bring it down until it comes to 0 in the next 5 years." "It's a problem that can be fixed," he remarked.

Rajan emphasized the discrepancy in malnutrition rates between regions, mentioning Kerala's 6% rate as an example, whereas some districts in Bihar and Jharkhand have rates higher than 35%. He emphasized the potential for concerted efforts to lower malnutrition levels to OECD standards.


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