Rajan clears air on quote, cautions on growth euphoria
Cautioning against ‘euphoria’ about India being the world’s fastest-growing economy, RBI Governor Raghuram Rajan on Wednesday said it still remains one of the poorest nations and has “a long way to go”, as he sought to contextualise his controversial ‘one-eyed is king’ analogy.
“We are still one of the poorest large countries in the world on a per capita basis and have a long way to go before we reasonably address the concerns of each one of our citizens,” Rajan said, adding that the current growth rate needs to be sustained for the next 20 years to ensure a “decent livelihood” for every Indian.
“The average Chinese citizen is over four times richer than average Indian,” the outspoken RBI Governor said while referring to the frequent comparison between the two nations. Stating that Chinese economy was smaller than India’s in the 1960s but is now five times bigger, Rajan said, “Among the BRICS (group) we have the lowest per capita GDP”.
Rajan’s comments follow criticism by some union ministers of his recent remarks in the US that India being proclaimed as the ‘bright spot in a gloomier world economy’ was like “a one-eyed man being a king in the land of blind”. Stating that his comment was misunderstood as “the words and not their intent” were given more importance, the former IMF Chief Economist said, “As a central banker who has to be pragmatic, I cannot get euphoric if India is the fastest growing large economy”.
Rebutting Rajan’s remarks, Finance Minister Arun Jaitley had said any other country would be celebrating at 7.5 per cent growth rate, while Commerce Minister Nirmala Sitharaman had said the RBI Governor should have used better words.
Rajan, however, said, “We can’t get carried away by our current superiority in growth, for as soon as we believe in our own superiority and start distributing future wealth as if we already have it, we stop doing all that is required to continue growing. This movie has played too many times in our past for us to not know how it ends.”
He, however, apologised to the visually-impaired people who were hurt by his use of this proverb. “I do want to apologise to a section of the population that I did hurt with these words, that is the visually impaired, or the blind,” Rajan said.
Putting in context his ‘one-eyed king’ remark, Rajan said the proverb has a long multinational history dating back to the Dutch philosopher Erasmus was the first to use it in Latin.