Growth rate declined due to Rajan's policies: Niti Aayog chief

New Delhi: Due to RBI's ex-governor Raghuram Rajan's policies, the growth rate dropped, said Niti Aayog's Vice Chairman Rajiv Kumar. Kumar said that the growth rate fell due to rising NPAs in the banking sector.

Blaming Raghuram Rajan's policies for low GDP, Kumar said that due to Raghuram Rajan's policies GDP had been impacted. Another reason that influenced growth was rising NPAs in the banking sector.

"Growth was declining because of rising NPAs in the banking sector. It happened because under previous governor Rajan, RBI brought in new mechanisms to identify stressed NPAs and bad loans continued to go up which is why banking sector stopped giving credit to industry", Rajiv Kumar said.

Meanwhile, just before the 2019 general elections, former RBI governor Raghuram Rajan has advice for the Modi government. According to Rajan, before the general elections, the Centre should consider bringing down the fiscal deficit, he advised the government to reduce CAD, which is expected to touch a historic high of 2.5 per cent of the GDP by the end of this year.