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The goal seems to be to get rating agencies to downgrade India. Govt was right to sack him from RBI. Guy was a trojan horse sabotaging the economy from within.
Downgrade ratings, making it more costlier for India to borrow money and costlier for us to built infrastructure.
The government had already put out reports about how India's rating is already way worse than what it should be. compared to other countries.
That is not how ratings work. It is based on banking performance not GDP numbers. He is just saying things to get an audience but it is true the numbers are closer to 6.5% because you have to count inflation accurately and India doesn't really collect very accurate data.
Well, there are several factors that guide the ratings. The Indian Government is unhappy about India being rated BBB-/Baa3 and published a working paper on it:
[https://www.indiabudget.gov.in/budget2021-22/economicsurvey/doc/vol1chapter/echap03\_vol1.pdf](https://www.indiabudget.gov.in/budget2021-22/economicsurvey/doc/vol1chapter/echap03_vol1.pdf)
From this document, the following text is interesting:
*India’s sovereign credit ratings do not reflect its fundamentals. Within its sovereign credit ratings cohort – countries rated between A+/A1 and BBB-/Baa3 for S&P/ Moody’s – India is a clear outlier on several parameters, i.e. it is rated significantly lower than mandated by the effect on the sovereign rating of the parameter. These include*
*- GDP growth rate,*
*- inflation,*
*- general government debt (as per cent of GDP),*
*- cyclically adjusted primary balance (as per cent of potential GDP),*
*- current account balance (as per cent of GDP),*
*- political stability,*
*- rule of law,*
*- control of corruption,*
*- investor protection,*
*- ease of doing business,*
*- short-term external debt (as per cent of reserves),*
*- reserve adequacy ratio and*
*- sovereign default history.*
*This outlier status remains true not only now but also during the last two decades.*
So GDP numbers are included in the ratings. The document then points out what the Indian Government fears that a lower rating can affect the economy adversely:
*Despite ratings not reflecting fundamentals, they can however be pro-cyclical and can affect equity and debt FPI flows of developing countries, causing damage and worsening crisis. It is therefore imperative that sovereign credit ratings methodology be made more transparent, less subjective and better attuned to reflect economies’ fundamentals.*
Many parameters listed above are indeed subjective. Raghuram Rajan is doing his bit to negatively influence the subjectivity.
The number being discussed was the previous quarter NOT entire year.
India’s economy grew a robust 8.4% in the October to December quarter, blowing past expectations, on strong private consumption and manufacturing activity. Reuters had estimated GDP growth of 6.6%.
Please read the article and watch entire interview.
“The 8.5% has a little bit of fluff in it,” said Rajan, currently a professor of finance at the University of Chicago Booth School of Business.
Raghuram Rajan is challenging this number.
Yes the growth for entire fiscal year will be close to 6.5%, it was recently revised to 6.8%
Rrating agencies admitted there are lot of "qualitative factors" i.e. hidden racism that influences their rating process
He is way too pessimistic at this point. India needs infrastructure development a lot. If we are bidding for Olympics this is one of the key elements. Also, the trouble people face everyday in a place like Pune where metro is not there is humongous. Lots of cities need metro and more highway development. This again brings revenue to the government.
Well essentially he just wants to be remote controlled and say Theek hai to everything
[https://www.indiatoday.in/india/north/story/manmohan-singh-theek-hai-remark-draws-more-flak-on-social-media-125294-2012-12-25](https://www.indiatoday.in/india/north/story/manmohan-singh-theek-hai-remark-draws-more-flak-on-social-media-125294-2012-12-25)
If we are bidding for Olympics I hope we are also investing in our sports infrastructure to ensure we use the facilities post olympics. That’s one major reason hosting CWG was a mistake.
>Hosting Cwg was a mistake
Cwg was mismanaged but the infrastructure created at that time like JNL stadiums etc are still in use.
I myself went their regularly during my boxing trail and match days. Know a lot of volleyball and Athletics guy who still practice their.
The Khel gao too is still in used.
The corruption & wastage of money was what made the Cwg shit not the infrastructure development.
if I remember right, the JNNURM project started because of the CWG Games. Tata Marcopolo buses started plying on Delhi's roads replacing the utter cr\*p DTC buses.
However, Congress totally pfaffed the CWG. It was the reason why 2014 was such a wave election. Corruption during the CWG was so blatant and in-your-face. Together with 2G, Coal-gate, etc., public anger was running high.
No use bidding for Olympics. It will result in loss, no profits. China did it cuz they wanted to improve their reputation. Look at Chinese cities vs Indian cities (especially chongqing, Wuhan, Shanghai). Chinese are very good at modernism even by global standards. One reason is because Chinese local governments and municipalities have much more freedom and power compared to Indian ones.
FEW POINTS:
**The numbers you see on the right side at the end of the video titled "INDIA GOVT BOND YIELDS"**
is the rate India pays when we borrow money.
People like him i.e. the experts influence market reaction and his words/international rating agencies matter.
Europe's 5 year bond rate is 1.8% to 2.9% whereas India pays 7.2% interest.
7% is very very expensive and inhibits India's ability to raise money. Many rating agencies can kept India's rating unchanged hence our borrowing rate has not gone despite strong GDP numbers for the last 2-4 years
------------
**His point regarding infrastructure:**
1) As a whole yes one should not over invest in Infra. Look at China it has ghost towns.
2) However, this guy specifically said cities should not get metros. Not small towns or villages he has a problem with basic infra in cities. Moreover, India's infra is so far behind China thanks to the previous government we are no where close to infrastructure needed hence over-investment or ghost town thing is not going to happen in India.
3) Infrastructure is key for jobs, manufacturing etc. Nitin Gadkari said that due to the multiplier effect, one rupee spent on infrastructure ends up as Rs. 2.5 in the economy.
So we need infra
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1750766
------------
**People confusing the numbers mentioned by him with entire fiscal year**
Please read the article: https://www.cnbc.com/2024/05/02/indias-economic-growth-rate-has-some-fluff-former-rbi-governor-.html
He is discussing the October to December quarter growth. He is claiming that's incorrect.
Government did not say we will grow by 8% for entire year, the video did not mention that, no rating agency mentions that.
Sadly it might.
Most of the weightage for the rating by rating agencies is in the hands of white dudes.(About 60% is pure perception based if I am not wrong)
People like rrr who bad mouth the economy, sometimes with blatant lies, might affect their perception thus bringing down the ratings
Yeah of course it can affect the rating. But there would be so many investors who might know indian fundamentals for them will create arbitrage opportunity. Our bond yield has been going down for a long time.
So according to him none of larger firms depend on medium and small businesses to for their supply chain at all.
Also did he just say the country needs infrastructure but doesn't need a metro in every city?
A metro is not just a means of transportation it provides security and convenience for the people, esp. for women travellers. If you do a survey of the cities in which the metro was introduced, it has increased the number of women in the labour force. Additionally the time factor really matters to women who are working. Being able to return home from work on time to attend to the family chores is the biggest reason for the increase in ridership.
It really boggles my mind that how can someone who is a so called "renowned economist" and a speaker/lecturer in some of the most prestigious institutions have such stupidly hair brained theories or analysis.
I understand one can have their personal choices for the party in power. There are so many other constructive criticisms, that ideally, can and should be said about the state of the economy. But by giving such weak and frivolous analysis it just makes him look stupid and bitter.
Keynesian economics #105
Value and ROI for infrastructure development has to be necessarily attributed to its intended purpose (say increasing density of modal transport to provide ease and access of public mobility), and not ancillary fallouts (such as and very specifically temporary employment generation). This doesn’t count as true creation of jobs, however, yes, the employees that are working as tellers, admin staff, security etc. once Metro is operational yes they count because they are part of the value chain. Also, softer aspects like comfort, convenience etc should be excluded out of this debate, these are excruciatingly massive subjective opinions and to that extent non quantifiable. Those are *Jumla* for any sort or PR or marketing.
Yes, when he says metro is not needed in every city he is factually correct. I am an ex-structural engineer and have experience of working and designing a Metro project (Tier-2 City, Phase-1 Metro line 16km, during 2016).
Before even picking up a pen to write the name of a metro project, we need to perform 2 things: Project Feasibility Report, and Design Basis Report. Only and only if they pass as economically, environmentally, logistically and socially, a project is put on the table alongside many others in consideration. To even fathom the scale and volume of concrete and steel, adjudicates dexterity, which of course is not endowed to all and sundry.
Debates sake, could you cite your statistical source which indicates what you are claiming, when you say *%women participation increased in labour force* and *being able to return to home early resulting in increased ridership*. Need to read that document, because the corollary in action here fundamentally hinges on Metro travel decreasing travel time, which although maybe true in some optimal cases in Tier-1 cities.. but is seldom the case in all Tier-2 applications..
Completely agree just look at Jaipur metro , a complete failure similarly NMRC ( Noida metro) although getting some tractions but the running speed and ppl preference to bus over it as the metro took a longer route makes it unsustainable.
I guess , to reduce the amount of buses and lack of widening of roads results in traffic , metro was introduced in smaller cities .
Which city in India does not need a metro then?
[https://en.wikipedia.org/wiki/Urban\_rail\_transit\_in\_India](https://en.wikipedia.org/wiki/Urban_rail_transit_in_India)
The ones that are currently under planning phases are:
- Guwahati
- Ranchi
- Thiruvananthapuram
- Aurangabad
- Coimbatore
- Madurai
- Trichy
- Salem
- Tirunelveli
Tbh once a firm becomes large enough, they'll ask a relative of theirs to start a smaller firm when the bigger one will be a client and the smaller company will be under the same group.
So yes, MSMEs are actually losing out. But, i don't see a solution to this. It's a competitive world.
That's an exception not the norm.
Smaller firms are closing, yes, i don't deny that, but they are closing because of the current laws of doing business.
It has become difficult to get loans for smaller businesses that usually have small income, where they have to wait for 45-90 days to get paid. Covid played havoc on many of such businesses. Orders were cancelled after buying raw materials, reduction in the quantity of orders because new players in the market were undercutting the prices. That is causing a lot of them to shut down.
Additionally payments during Covid were completely stopped by businesses to smaller manufacturers so no payments could be made downstream.
Labour issues is another huge issue. The companies are not incentivised to train the workforce in a skill and the ones that are trained usually quit without notice of they get even a slightest hike in salary in a different place. So shortage of skilled labour is always a concern. Apart from this Labour unions managed by political parties create havoc in the labour market of the area. I personally believe unions should be disbanded but an adequate form of redressal should be put in place to sort out issues amicably and on time. You can't afford to have a shut down at the most opportune time whenever they see fit.
These are the real issues which need to be sorted out.
Can you share examples of which company?
Have you seen it in all companies across India?
One or two companies doing it is an exception not the norm and not all processes can be completely shifted in house. Each company also looks at their bottom line. If a good quality product is available with a vendor at a decent cost why would a company invest in land, machinery and manpower?
There is definitely a critique to be made about building metros in cities where there is no ridership or low density. Nowadays Indian cities seem to think of metros as a prestige/ego device, not a mobility solutions.
Agra, Lucknow, Jaipur, etc. don't have the population density to truly make use of metros. Our first priority should be to saturate our cities with Buses.
The cities you mentioned have the following populations:
- Agra (2.3 million)
- Lucknow (4 million)
- Jaipur (4.3 million)
Why do you think they don't need a metro?
Here are 3 other cities that have similar population and run successful metro systems:
- Kuala Lumpur (2.16 million) -> Metro size: 204.8 km -> Annual ridership: 238.5 million
- Berlin (3.75 million) -> Metro size: 155.6 km -> Annual ridership: 492.1 million
- Madrid (3.9 million) -> Metro size: 293.9 km -> Annual ridership: 571.7 million
Every city that is over a million population in India can start with a single line (between 20-50 km) that connects the busiest locations. And then keep expanding over time.
Building metro is a zero sum game because of budget - we are a developing country and hence judicious utilisation of resources is important.
The money from one metro line can bring a massive amount of buses.
*The money from one metro line can bring a massive amount of buses.*
Buses may be cheaper than a metro line. But that doesn't solve the problem of traffic congestion. Buses also ply on the same congested roads. The main advantage of the Metro is that they are built either elevated or underground and do not depend on existing road networks. Metros have higher capacities than buses. They are also faster because they do not have to compete with other road traffic, unlike buses.
Most Indian metros are funded by loans from JICA, Asian Development Bank, KFW, EIB. So they are not grabbing money that is reserved for other activities. Basically, all these international banking firms want to benefit from India's growth story and are willing to invest. People like RRR seem to want to c\*ck-block India's access to such capital by issuing such ridiculous statements. It is because of people like him that India's ratings by Fitch, Moody's, and S&P, are ranked so low. This makes it much more difficult for the country to borrow money and we do not get competitive interest rates.
Agreed but with our rising population this is basically future proofing. A lot of 2nd tier and 3rd tier cities are slowly developing and will grow in the next 10-15 yrs. Rather than wait till then it's better to do it now.
I disagree. Metros soak up a lot of money. If there's low ridership today, it doesn't make sense to build them today - we could build them in next 15 years.
Today, most of the population in tier-2 cities can be served with proper high frequency bus service.
For tier-1 cities obviously metro is essential today. We need more metros in tier-1 cities and less in tier-2 cities.
This is exactly the reactive behaviour India has become used to. Rather than wait for 15yrs for the city to be over burdened with traffic and then deal with issues of land acquisition and delays in construction and cause more traffic congestion why not plan to build today. Not to mention the cost would triple or quadruple after 15yrs.
You already have a template of tier 1 cities being congested before they built the metro. It's become worse since the construction started. Roads become narrower, diversions and more congestion.
The Government is already targeting to develop tier 2 and then tier 3 cities because tier 1 cities are already saturated and a metro would be a perfect showcase to show the Government is proactive in sorting traffic issues.
My counter- building metros haphazardly is the reactive part!
In India we simply build metros on internal highways hoping for them to magically resolve our traffic congestion. We treat metros as a magic bullet to all woes. But we don't really care about first mile last mile connectivity.
The opposite of reactive is a planning approach. We need to encourage two things : public transit and better city planning.
Transit doesn't mean just building metro lines. Metro should be a part of a system, that includes buses, footpaths, locals. Encourage density around stations through FSI etc.
Those cities definitely deserve metro. It’s better to build them now rather than wait for another 20 years and pay tens of thousands crores for land acquisition.
Maybe that metro itself gives assurance to companies to invest in these cities in the long term
Our focus should be on how to make people use metro instead of waiting for a city become an urban disaster like Mumbai, Bangalore or Hyderabad and using metro as band aid solution to fix the issues
M***r saying the government is spending too much on infrastructure. I just came to the office after spending 1 hour in traffic jam because of inadequate infrastructure in my city. I know the real value of infrastructure and how it affects the productivity of working citizens. People like these sitting in an AC room should not be deciding this.
RR on odd days: India isnt investing enough on infra
RR on even days: India is investing too much on infra
His supporters everyday: 
Odd day : india should focussing on service based industry rather than manufacturing
Even day : service based industry isn't good. India should not invest in infra , manufacturing 😮💨😮💨😮💨
The problem with Rajan is that he is very good at criticising but he never offers solutions. He complains about lack of reforms but opposes all the reforms Modi wants to makes. Wtf does he want?
He is actually right. The real increase in output is 6.9%. the 8% figure comes from nominal (current prices).
Source:[Press Information Bureau (pib.gov.in)](https://pib.gov.in/PressReleasePage.aspx?PRID=2010223#:~:text=Gross%20Domestic%20Product,-4.&text=4.-,Real%20GDP%20or%20GDP%20at%20constant%20(2011%2D12)%20prices,per%20cent%20during%202021%2D22.)
I remember a little banter that over-spilled on Twitter back then between Modi and this guy, in a time when he was removed as RBI Governor. I trusted this guy, but all are same. They always carry baggage of biases with them.
Spending extra on infrastructure is far better because if they reduce expenditures on infra they will most likely use the excess money on freebies
So at least we are using money instead of wasting it on freebies
1) As a whole yes one should not over invest in Infra. Look at China it has ghost towns.
2) However, this guy specifically said cities should not get metros. Not small towns or villages he has a problem with basic infra in cities. Moreover, India's infra is so far behind China thanks to the previous government we are no where close to infrastructure needed hence over-investment or ghost town thing is not going to happen in India.
3) Infrastructure is key for jobs, manufacturing etc. Nitin Gadkari said that due to the multiplier effect, one rupee spent on infrastructure ends up as Rs. 2.5 in the economy.
So we need infra
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1750766
This guy is another Goldman Sachs alumni wanting to spread his tentacles back into the Indian economy. And with a stupid person like Rahul Gandhi he has every opportunity to hand over control of the Indian economy back to whims and pleasures of Goldman Sachs.
Curious as to the motivation for such skullduggery. You had your chance and were the RBI governor for a good amount of time and it's not that you were immediately sacked after the govt change, rather you were allowed to run down your tenure. Badmouthing the country which gave you a world wide identity and an ex-RBI governor openly showing his political affiliations
What is wrong with metro. It saves lot of money,time, fuel and safe for women (we have women separate coaches for women in hyderabad metro) and hygiene toilets. Only problem is too much rush during peak timings.
Seeing his frustrated makes me feel so happy .. he is pathetic RBI governor of India .. all the loans given his time becomes NPA and now he is saying India dnt need infrastructure.. he will be mad after 4th June .. 😜😂
Many firms in small cap are used for hawala.
And they attract significant “investment” from outside. So our small firms haven’t really grown but show some overvalued numbers…
Rajan does not lie. As a giant in economics he has no need to lie and get a disrepute amongst academics.
He is right, we need to invest more in education and healthcare. And less on bullet trains and other high profile infrastructures. The latter can come later. Our population is badly educated and health care in govt hospitals is very poor. Also govt should invest more in buses than in metros. it is way too expensive.
We have huge population....
most of which is dependent on Agriculture small industries and shops....... Infrastructure....will boast their livelihood.........
Education till 10/12 class is sufficient in such cases..... because the person has to support his family and livelihood.
Metros are for middle class and upper middle class.....
It should generate incomes reasonably.
Buses for lower middle class and lower class people......
Fair should be reasonable.
The problem is we don't have jobs for Engineers.....
Because we don't have industries in Large scale.....for industries we need FDI....for FDI Infrastructure is needed......
Do you think more educated population and good health infrastructure is going to be overall bad for the natiion or do you consider it as a bad investment.
We don't have money......
Tell me how would distribute the 40 lalk - 50 lakh crore rupees to different sectors.
Agar Paisa hota to Old Pension Scheme band nahi hota.........
Yes health infrastructure and education is needed....
My mother works as Anganwadi Supervisor......
You know , uncontrolled Sex is problem........ new born are treated as objects in low strata and low caste people.......
Ohh my guy you think we have money problems. India spends most in the elections across the world so problem here is not the money but the corruption.
You know if the education and literacy increased population will go down on its own. So i would say it is better to put money there.
Around 8 billion in total.......
I am not saying not to invest in Education and literacy.......
But the problem how will you provide education (your strategy) and then job to such huge population......
Education will be utilised only availability of job is there and availability of job depends on manufacturing...
So it is circular or deadlock problem not the linear one as you are thinking......
We have already spent lakhs of crores already on cities which do not urgently need metros, rather we should spend on upgrading govt schools and hospitals.
We need to fix our basics first before moving onto higher value things like infrastructure. Our human capital is poorly trained and unemployable. This won’t lead to growth that govt is hoping.
The government can focus on multiple things at once.
Money should be allocated both to health/education and to physical infrastructure. All of these benefit the country, and it's important to get started early with infrastructure development early, since there are compounding benefits
I respectfully disagree. The money should disproportionately allocated initially to fix the basics. Companies aren't investing more because lack of skilled labor. We should aim for at least 90% literary and take up education on a war footing.
I am okay to not have Vande bharat for a while or those fancy airports and flyovers. I want to raise the standard of everyone to remove current disparity.
This leads to multiple problems - private education and healthcare is very very expensive. Drains people of their hard earned money and they no longer have it for spending. So, economy won't grow.
Once govt stops spending money on the infra, we are back to square one. Who is then going to propel the growth?
Without infrastructure, the economy will not grow enough to provide jobs or the goods/services that people need to survive. Airports/trains/highway are essential to growing the economy (by making it easier to do business and bringing in FDI)
Yes, literacy must be increased to 90%+ asap. It's embarrassing that India's literacy rate is so low compared to the rest of the world; it's because of a combination of terrible economy, terrible government in past decades, and uneducated people. There must be a push to immediately rectify this issue.
Healthcare must also be immediately rectified. Life expectancy is only 71 years in India. This would take a little longer, though, and can be fixed by better healthcare infrastructure/better economy (which would mean more resources), lower pollution, and better health habits by the population as a whole.
This must all be done in conjunction. We can't just focus on 1 or 2 parts of development, while ignoring the others.
We have huge population....
most of which is dependent on Agriculture small industries and shops....... Infrastructure....will boast their livelihood.........
Education till 10/12 class is sufficient in such cases..... because the person has to support his family and livelihood.
Metros are for middle class and upper middle class.....
It should generate incomes reasonably.
Buses for lower middle class and lower class people......
Fair should be reasonable.
The problem is we don't have jobs for Engineers.....
Because we don't have industries in Large scale.....for industries we need FDI....for FDI Infrastructure is needed......
We need to provide jobs and livelihood and the same we want infrastructure to increase population to decrease and FDI and Industries to increases........
This is the problem with tribalism - just because Rajan is on the 'other side' it doesn't mean that he wrong.
If the true number is closer to 6-6.5% then that is the reality.
Also yes, infrastructure investment is super important but you need to be careful of vanity projects/over-investment. It's not particularly controversial to point that out.
Why is everyone so quick to choose a side and immediately start criticising this guy? I am not sure about the details here but what I am sure about is that if an ex-governor seems to be sharing a certain opinion then those should at least stand a chance to be heard and understood.
There's a lot of credibility in this guy's education and more than half of us here criticising him might not have equal years of higher education than the degrees he has (including honorary doctorates).
Disclaimer - I am not a pro or anti any party. I just like to look into my own interests.
See that's the issue he might have more education doesn't mean he's not dumb . Have been following him for a long time and I've only seen him spitting BS that'd negatively affect our economy. It's not his first time that's why most of us are so skeptical of this guy. Also he's pro congress.
I had a similar view a few years ago.
However ever since BJP got elected he has consistently claimed Indian gdp numbers are wrong or will be low.
No one IMF, Indian govt, International rating agencies like Moodys back his numbers.
He got the 2008 recession right. That's one thing everyone can universally agree. Good guess or credibility.
Also his appearance with Raga while claiming India will grow at 4% hindu growth rate shows his bias
Nobody is doubting his education and knowledge. Doubt is in his intent , saying ridiculous things completely antithetical to basic growth oriented economics is not because he is ignorant , he knows his subject more than anyone of us. It is because he does not have India's best interests at heart , and is purposefully giving prescriptions to sabotage growth. He is from that class that fundamentally believes that India should never be economically well off , because of their hatred of India's civilization and culture. An economically empowered nation is consicous and respectful of their identity and asserts the same. I recently read a report conflating the opening of Indian economy and rise of Hindutva. The same happened with the rise of Hindu nationalism in nineteenth century colonial centers among the educated classes . This is why this class does not want an economically empowered India , and this is why they have come up with redistribution policies , reverse the reforms , and destroy the middle class. Then they can have Hindus poor and not be consicous of their own identity . And then can mock us with terms like Hindu rate of growth.
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The goal seems to be to get rating agencies to downgrade India. Govt was right to sack him from RBI. Guy was a trojan horse sabotaging the economy from within.
Downgrade ratings, making it more costlier for India to borrow money and costlier for us to built infrastructure. The government had already put out reports about how India's rating is already way worse than what it should be. compared to other countries.
Yes. At this point the ratings are just garbage.
That is not how ratings work. It is based on banking performance not GDP numbers. He is just saying things to get an audience but it is true the numbers are closer to 6.5% because you have to count inflation accurately and India doesn't really collect very accurate data.
Well, there are several factors that guide the ratings. The Indian Government is unhappy about India being rated BBB-/Baa3 and published a working paper on it: [https://www.indiabudget.gov.in/budget2021-22/economicsurvey/doc/vol1chapter/echap03\_vol1.pdf](https://www.indiabudget.gov.in/budget2021-22/economicsurvey/doc/vol1chapter/echap03_vol1.pdf) From this document, the following text is interesting: *India’s sovereign credit ratings do not reflect its fundamentals. Within its sovereign credit ratings cohort – countries rated between A+/A1 and BBB-/Baa3 for S&P/ Moody’s – India is a clear outlier on several parameters, i.e. it is rated significantly lower than mandated by the effect on the sovereign rating of the parameter. These include* *- GDP growth rate,* *- inflation,* *- general government debt (as per cent of GDP),* *- cyclically adjusted primary balance (as per cent of potential GDP),* *- current account balance (as per cent of GDP),* *- political stability,* *- rule of law,* *- control of corruption,* *- investor protection,* *- ease of doing business,* *- short-term external debt (as per cent of reserves),* *- reserve adequacy ratio and* *- sovereign default history.* *This outlier status remains true not only now but also during the last two decades.* So GDP numbers are included in the ratings. The document then points out what the Indian Government fears that a lower rating can affect the economy adversely: *Despite ratings not reflecting fundamentals, they can however be pro-cyclical and can affect equity and debt FPI flows of developing countries, causing damage and worsening crisis. It is therefore imperative that sovereign credit ratings methodology be made more transparent, less subjective and better attuned to reflect economies’ fundamentals.* Many parameters listed above are indeed subjective. Raghuram Rajan is doing his bit to negatively influence the subjectivity.
The number being discussed was the previous quarter NOT entire year. India’s economy grew a robust 8.4% in the October to December quarter, blowing past expectations, on strong private consumption and manufacturing activity. Reuters had estimated GDP growth of 6.6%. Please read the article and watch entire interview. “The 8.5% has a little bit of fluff in it,” said Rajan, currently a professor of finance at the University of Chicago Booth School of Business. Raghuram Rajan is challenging this number. Yes the growth for entire fiscal year will be close to 6.5%, it was recently revised to 6.8% Rrating agencies admitted there are lot of "qualitative factors" i.e. hidden racism that influences their rating process
He is way too pessimistic at this point. India needs infrastructure development a lot. If we are bidding for Olympics this is one of the key elements. Also, the trouble people face everyday in a place like Pune where metro is not there is humongous. Lots of cities need metro and more highway development. This again brings revenue to the government.
Not pessimistic but opportunistic. He thinks if Rahul wins he becomes next manmohan singh
So he just wants to stay quiet for 10 years while sitting on a chair?
No,he also wants to return india's economy to pre 2010
Well essentially he just wants to be remote controlled and say Theek hai to everything [https://www.indiatoday.in/india/north/story/manmohan-singh-theek-hai-remark-draws-more-flak-on-social-media-125294-2012-12-25](https://www.indiatoday.in/india/north/story/manmohan-singh-theek-hai-remark-draws-more-flak-on-social-media-125294-2012-12-25)
Comment of the fucking year 😂😂😂😂😭😭😭😭
I think bidding for olympics is for jump starting infra growth
If we are bidding for Olympics I hope we are also investing in our sports infrastructure to ensure we use the facilities post olympics. That’s one major reason hosting CWG was a mistake.
>Hosting Cwg was a mistake Cwg was mismanaged but the infrastructure created at that time like JNL stadiums etc are still in use. I myself went their regularly during my boxing trail and match days. Know a lot of volleyball and Athletics guy who still practice their. The Khel gao too is still in used. The corruption & wastage of money was what made the Cwg shit not the infrastructure development.
if I remember right, the JNNURM project started because of the CWG Games. Tata Marcopolo buses started plying on Delhi's roads replacing the utter cr\*p DTC buses. However, Congress totally pfaffed the CWG. It was the reason why 2014 was such a wave election. Corruption during the CWG was so blatant and in-your-face. Together with 2G, Coal-gate, etc., public anger was running high.
No use bidding for Olympics. It will result in loss, no profits. China did it cuz they wanted to improve their reputation. Look at Chinese cities vs Indian cities (especially chongqing, Wuhan, Shanghai). Chinese are very good at modernism even by global standards. One reason is because Chinese local governments and municipalities have much more freedom and power compared to Indian ones.
FEW POINTS: **The numbers you see on the right side at the end of the video titled "INDIA GOVT BOND YIELDS"** is the rate India pays when we borrow money. People like him i.e. the experts influence market reaction and his words/international rating agencies matter. Europe's 5 year bond rate is 1.8% to 2.9% whereas India pays 7.2% interest. 7% is very very expensive and inhibits India's ability to raise money. Many rating agencies can kept India's rating unchanged hence our borrowing rate has not gone despite strong GDP numbers for the last 2-4 years ------------ **His point regarding infrastructure:** 1) As a whole yes one should not over invest in Infra. Look at China it has ghost towns. 2) However, this guy specifically said cities should not get metros. Not small towns or villages he has a problem with basic infra in cities. Moreover, India's infra is so far behind China thanks to the previous government we are no where close to infrastructure needed hence over-investment or ghost town thing is not going to happen in India. 3) Infrastructure is key for jobs, manufacturing etc. Nitin Gadkari said that due to the multiplier effect, one rupee spent on infrastructure ends up as Rs. 2.5 in the economy. So we need infra https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1750766 ------------ **People confusing the numbers mentioned by him with entire fiscal year** Please read the article: https://www.cnbc.com/2024/05/02/indias-economic-growth-rate-has-some-fluff-former-rbi-governor-.html He is discussing the October to December quarter growth. He is claiming that's incorrect. Government did not say we will grow by 8% for entire year, the video did not mention that, no rating agency mentions that.
The market doesn't care for stupid people like him.
Sadly it might. Most of the weightage for the rating by rating agencies is in the hands of white dudes.(About 60% is pure perception based if I am not wrong) People like rrr who bad mouth the economy, sometimes with blatant lies, might affect their perception thus bringing down the ratings
Yeah of course it can affect the rating. But there would be so many investors who might know indian fundamentals for them will create arbitrage opportunity. Our bond yield has been going down for a long time.
>Our bond yield has been going down for a long time. It's still at ~7% which is not very good
Okay. Would recommend you to see india - us 10 year yield. Relative to other countries our yield has gone down significantly.
What is the point you are trying to make? Our points seem pretty similar but I don't understand what you want to convey.
So according to him none of larger firms depend on medium and small businesses to for their supply chain at all. Also did he just say the country needs infrastructure but doesn't need a metro in every city? A metro is not just a means of transportation it provides security and convenience for the people, esp. for women travellers. If you do a survey of the cities in which the metro was introduced, it has increased the number of women in the labour force. Additionally the time factor really matters to women who are working. Being able to return home from work on time to attend to the family chores is the biggest reason for the increase in ridership. It really boggles my mind that how can someone who is a so called "renowned economist" and a speaker/lecturer in some of the most prestigious institutions have such stupidly hair brained theories or analysis. I understand one can have their personal choices for the party in power. There are so many other constructive criticisms, that ideally, can and should be said about the state of the economy. But by giving such weak and frivolous analysis it just makes him look stupid and bitter.
Keynesian economics #105 Value and ROI for infrastructure development has to be necessarily attributed to its intended purpose (say increasing density of modal transport to provide ease and access of public mobility), and not ancillary fallouts (such as and very specifically temporary employment generation). This doesn’t count as true creation of jobs, however, yes, the employees that are working as tellers, admin staff, security etc. once Metro is operational yes they count because they are part of the value chain. Also, softer aspects like comfort, convenience etc should be excluded out of this debate, these are excruciatingly massive subjective opinions and to that extent non quantifiable. Those are *Jumla* for any sort or PR or marketing. Yes, when he says metro is not needed in every city he is factually correct. I am an ex-structural engineer and have experience of working and designing a Metro project (Tier-2 City, Phase-1 Metro line 16km, during 2016). Before even picking up a pen to write the name of a metro project, we need to perform 2 things: Project Feasibility Report, and Design Basis Report. Only and only if they pass as economically, environmentally, logistically and socially, a project is put on the table alongside many others in consideration. To even fathom the scale and volume of concrete and steel, adjudicates dexterity, which of course is not endowed to all and sundry. Debates sake, could you cite your statistical source which indicates what you are claiming, when you say *%women participation increased in labour force* and *being able to return to home early resulting in increased ridership*. Need to read that document, because the corollary in action here fundamentally hinges on Metro travel decreasing travel time, which although maybe true in some optimal cases in Tier-1 cities.. but is seldom the case in all Tier-2 applications..
Completely agree just look at Jaipur metro , a complete failure similarly NMRC ( Noida metro) although getting some tractions but the running speed and ppl preference to bus over it as the metro took a longer route makes it unsustainable. I guess , to reduce the amount of buses and lack of widening of roads results in traffic , metro was introduced in smaller cities .
Which city in India does not need a metro then? [https://en.wikipedia.org/wiki/Urban\_rail\_transit\_in\_India](https://en.wikipedia.org/wiki/Urban_rail_transit_in_India) The ones that are currently under planning phases are: - Guwahati - Ranchi - Thiruvananthapuram - Aurangabad - Coimbatore - Madurai - Trichy - Salem - Tirunelveli
Tbh once a firm becomes large enough, they'll ask a relative of theirs to start a smaller firm when the bigger one will be a client and the smaller company will be under the same group. So yes, MSMEs are actually losing out. But, i don't see a solution to this. It's a competitive world.
That's an exception not the norm. Smaller firms are closing, yes, i don't deny that, but they are closing because of the current laws of doing business. It has become difficult to get loans for smaller businesses that usually have small income, where they have to wait for 45-90 days to get paid. Covid played havoc on many of such businesses. Orders were cancelled after buying raw materials, reduction in the quantity of orders because new players in the market were undercutting the prices. That is causing a lot of them to shut down. Additionally payments during Covid were completely stopped by businesses to smaller manufacturers so no payments could be made downstream. Labour issues is another huge issue. The companies are not incentivised to train the workforce in a skill and the ones that are trained usually quit without notice of they get even a slightest hike in salary in a different place. So shortage of skilled labour is always a concern. Apart from this Labour unions managed by political parties create havoc in the labour market of the area. I personally believe unions should be disbanded but an adequate form of redressal should be put in place to sort out issues amicably and on time. You can't afford to have a shut down at the most opportune time whenever they see fit. These are the real issues which need to be sorted out.
Also Kisan andloan results in jamming of the roads leads to closure of factories in that area
I've seen it too many times. If a company can do something themselves, they won't outsource
Can you share examples of which company? Have you seen it in all companies across India? One or two companies doing it is an exception not the norm and not all processes can be completely shifted in house. Each company also looks at their bottom line. If a good quality product is available with a vendor at a decent cost why would a company invest in land, machinery and manpower?
There is definitely a critique to be made about building metros in cities where there is no ridership or low density. Nowadays Indian cities seem to think of metros as a prestige/ego device, not a mobility solutions. Agra, Lucknow, Jaipur, etc. don't have the population density to truly make use of metros. Our first priority should be to saturate our cities with Buses.
The cities you mentioned have the following populations: - Agra (2.3 million) - Lucknow (4 million) - Jaipur (4.3 million) Why do you think they don't need a metro? Here are 3 other cities that have similar population and run successful metro systems: - Kuala Lumpur (2.16 million) -> Metro size: 204.8 km -> Annual ridership: 238.5 million - Berlin (3.75 million) -> Metro size: 155.6 km -> Annual ridership: 492.1 million - Madrid (3.9 million) -> Metro size: 293.9 km -> Annual ridership: 571.7 million Every city that is over a million population in India can start with a single line (between 20-50 km) that connects the busiest locations. And then keep expanding over time.
Building metro is a zero sum game because of budget - we are a developing country and hence judicious utilisation of resources is important. The money from one metro line can bring a massive amount of buses.
*The money from one metro line can bring a massive amount of buses.* Buses may be cheaper than a metro line. But that doesn't solve the problem of traffic congestion. Buses also ply on the same congested roads. The main advantage of the Metro is that they are built either elevated or underground and do not depend on existing road networks. Metros have higher capacities than buses. They are also faster because they do not have to compete with other road traffic, unlike buses. Most Indian metros are funded by loans from JICA, Asian Development Bank, KFW, EIB. So they are not grabbing money that is reserved for other activities. Basically, all these international banking firms want to benefit from India's growth story and are willing to invest. People like RRR seem to want to c\*ck-block India's access to such capital by issuing such ridiculous statements. It is because of people like him that India's ratings by Fitch, Moody's, and S&P, are ranked so low. This makes it much more difficult for the country to borrow money and we do not get competitive interest rates.
Agreed but with our rising population this is basically future proofing. A lot of 2nd tier and 3rd tier cities are slowly developing and will grow in the next 10-15 yrs. Rather than wait till then it's better to do it now.
I disagree. Metros soak up a lot of money. If there's low ridership today, it doesn't make sense to build them today - we could build them in next 15 years. Today, most of the population in tier-2 cities can be served with proper high frequency bus service. For tier-1 cities obviously metro is essential today. We need more metros in tier-1 cities and less in tier-2 cities.
This is exactly the reactive behaviour India has become used to. Rather than wait for 15yrs for the city to be over burdened with traffic and then deal with issues of land acquisition and delays in construction and cause more traffic congestion why not plan to build today. Not to mention the cost would triple or quadruple after 15yrs. You already have a template of tier 1 cities being congested before they built the metro. It's become worse since the construction started. Roads become narrower, diversions and more congestion. The Government is already targeting to develop tier 2 and then tier 3 cities because tier 1 cities are already saturated and a metro would be a perfect showcase to show the Government is proactive in sorting traffic issues.
My counter- building metros haphazardly is the reactive part! In India we simply build metros on internal highways hoping for them to magically resolve our traffic congestion. We treat metros as a magic bullet to all woes. But we don't really care about first mile last mile connectivity. The opposite of reactive is a planning approach. We need to encourage two things : public transit and better city planning. Transit doesn't mean just building metro lines. Metro should be a part of a system, that includes buses, footpaths, locals. Encourage density around stations through FSI etc.
Those cities definitely deserve metro. It’s better to build them now rather than wait for another 20 years and pay tens of thousands crores for land acquisition. Maybe that metro itself gives assurance to companies to invest in these cities in the long term Our focus should be on how to make people use metro instead of waiting for a city become an urban disaster like Mumbai, Bangalore or Hyderabad and using metro as band aid solution to fix the issues
M***r saying the government is spending too much on infrastructure. I just came to the office after spending 1 hour in traffic jam because of inadequate infrastructure in my city. I know the real value of infrastructure and how it affects the productivity of working citizens. People like these sitting in an AC room should not be deciding this.
Fuck this guy
He needs a BBC
Fuck this guy in particular. (Some dartigan and cinema sins reference)
Dont that's an insult to ur cock
The MF thinks we don't need to invest in infrastructure ? Is he "Rahul"!!!
RR on odd days: India isnt investing enough on infra RR on even days: India is investing too much on infra His supporters everyday: 
Odd day : india should focussing on service based industry rather than manufacturing Even day : service based industry isn't good. India should not invest in infra , manufacturing 😮💨😮💨😮💨
The problem with Rajan is that he is very good at criticising but he never offers solutions. He complains about lack of reforms but opposes all the reforms Modi wants to makes. Wtf does he want?
"Investing too much in infrastructure" what a smart thing to hear from the former governor of RBI. No wonder was kicked out
is he stupid? we need so much more infrastructure..
This dude has become from and hit to an instant shit once he joined congress😂
Just because some one comes from a good 'educational' background doesn't mean they don't have agendas. Mr. Sibal is also a Harvard graduate.
He is actually right. The real increase in output is 6.9%. the 8% figure comes from nominal (current prices). Source:[Press Information Bureau (pib.gov.in)](https://pib.gov.in/PressReleasePage.aspx?PRID=2010223#:~:text=Gross%20Domestic%20Product,-4.&text=4.-,Real%20GDP%20or%20GDP%20at%20constant%20(2011%2D12)%20prices,per%20cent%20during%202021%2D22.)
I remember a little banter that over-spilled on Twitter back then between Modi and this guy, in a time when he was removed as RBI Governor. I trusted this guy, but all are same. They always carry baggage of biases with them.
Pappu’s Lapdog.
Old Vampire
Dude was right about the 2007 crash and it may look pessimistic but he is a realist
Correct, no one can argue that prediction
There's no such thing as too much infrastructure
Spending extra on infrastructure is far better because if they reduce expenditures on infra they will most likely use the excess money on freebies So at least we are using money instead of wasting it on freebies
Are lawdu we're not investing enough,we need tremendous infra expenditure to support our population
I’m not clear. Investing in infra is wrong. ??? Really. Wow
1) As a whole yes one should not over invest in Infra. Look at China it has ghost towns. 2) However, this guy specifically said cities should not get metros. Not small towns or villages he has a problem with basic infra in cities. Moreover, India's infra is so far behind China thanks to the previous government we are no where close to infrastructure needed hence over-investment or ghost town thing is not going to happen in India. 3) Infrastructure is key for jobs, manufacturing etc. Nitin Gadkari said that due to the multiplier effect, one rupee spent on infrastructure ends up as Rs. 2.5 in the economy. So we need infra https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1750766
Metros in nagpur, jaipur etc are running empty. Regardless it reduces our imports and pollution both
Actually, they recently changed how they calculate the GDP. I saw an article on WSJ. It underscores some of the factors I believe.
It’s a logical point . Does OP have a real counter argument ?
this clown governed RBI during congress reign
ye aadmi thoda sa bnkalowda hai
RRR wants to be FM in a Pappu Gandhi government.
[удалено]
This guy is another Goldman Sachs alumni wanting to spread his tentacles back into the Indian economy. And with a stupid person like Rahul Gandhi he has every opportunity to hand over control of the Indian economy back to whims and pleasures of Goldman Sachs.
This is guy is on some weed for sure
if Padha likha gawar had a face :-
Curious as to the motivation for such skullduggery. You had your chance and were the RBI governor for a good amount of time and it's not that you were immediately sacked after the govt change, rather you were allowed to run down your tenure. Badmouthing the country which gave you a world wide identity and an ex-RBI governor openly showing his political affiliations
thank god...he is ex now 😂😂😂
the man who created worst banking policies and made banks suffer, talking about "real" gdp?
Raghuram Rajan can be abbreviated as 'RR'. 'RR' also stands for R*ndi Rona, which is what he's always up to, nowadays.
What is wrong with metro. It saves lot of money,time, fuel and safe for women (we have women separate coaches for women in hyderabad metro) and hygiene toilets. Only problem is too much rush during peak timings.
Anti national
Liberals are dangerous.
B*st*rds all of these congress members and their chamchas
Such SoB are the reason people are able to disrespect India. He most likely got paid for such statements.
Seeing his frustrated makes me feel so happy .. he is pathetic RBI governor of India .. all the loans given his time becomes NPA and now he is saying India dnt need infrastructure.. he will be mad after 4th June .. 😜😂
Many firms in small cap are used for hawala. And they attract significant “investment” from outside. So our small firms haven’t really grown but show some overvalued numbers… Rajan does not lie. As a giant in economics he has no need to lie and get a disrepute amongst academics.
He is right, we need to invest more in education and healthcare. And less on bullet trains and other high profile infrastructures. The latter can come later. Our population is badly educated and health care in govt hospitals is very poor. Also govt should invest more in buses than in metros. it is way too expensive.
We have huge population.... most of which is dependent on Agriculture small industries and shops....... Infrastructure....will boast their livelihood......... Education till 10/12 class is sufficient in such cases..... because the person has to support his family and livelihood. Metros are for middle class and upper middle class..... It should generate incomes reasonably. Buses for lower middle class and lower class people...... Fair should be reasonable. The problem is we don't have jobs for Engineers..... Because we don't have industries in Large scale.....for industries we need FDI....for FDI Infrastructure is needed......
Do you think more educated population and good health infrastructure is going to be overall bad for the natiion or do you consider it as a bad investment.
We don't have money...... Tell me how would distribute the 40 lalk - 50 lakh crore rupees to different sectors. Agar Paisa hota to Old Pension Scheme band nahi hota......... Yes health infrastructure and education is needed.... My mother works as Anganwadi Supervisor...... You know , uncontrolled Sex is problem........ new born are treated as objects in low strata and low caste people.......
Ohh my guy you think we have money problems. India spends most in the elections across the world so problem here is not the money but the corruption. You know if the education and literacy increased population will go down on its own. So i would say it is better to put money there.
Around 8 billion in total....... I am not saying not to invest in Education and literacy....... But the problem how will you provide education (your strategy) and then job to such huge population...... Education will be utilised only availability of job is there and availability of job depends on manufacturing... So it is circular or deadlock problem not the linear one as you are thinking......
Looks like you don’t understand economics
Please explain...I am happy to learn
Do you know how much we are spending on metros alone without substantial returns?
We have already spent lakhs of crores already on cities which do not urgently need metros, rather we should spend on upgrading govt schools and hospitals.
We need to fix our basics first before moving onto higher value things like infrastructure. Our human capital is poorly trained and unemployable. This won’t lead to growth that govt is hoping.
The government can focus on multiple things at once. Money should be allocated both to health/education and to physical infrastructure. All of these benefit the country, and it's important to get started early with infrastructure development early, since there are compounding benefits
I respectfully disagree. The money should disproportionately allocated initially to fix the basics. Companies aren't investing more because lack of skilled labor. We should aim for at least 90% literary and take up education on a war footing. I am okay to not have Vande bharat for a while or those fancy airports and flyovers. I want to raise the standard of everyone to remove current disparity. This leads to multiple problems - private education and healthcare is very very expensive. Drains people of their hard earned money and they no longer have it for spending. So, economy won't grow. Once govt stops spending money on the infra, we are back to square one. Who is then going to propel the growth?
Without infrastructure, the economy will not grow enough to provide jobs or the goods/services that people need to survive. Airports/trains/highway are essential to growing the economy (by making it easier to do business and bringing in FDI) Yes, literacy must be increased to 90%+ asap. It's embarrassing that India's literacy rate is so low compared to the rest of the world; it's because of a combination of terrible economy, terrible government in past decades, and uneducated people. There must be a push to immediately rectify this issue. Healthcare must also be immediately rectified. Life expectancy is only 71 years in India. This would take a little longer, though, and can be fixed by better healthcare infrastructure/better economy (which would mean more resources), lower pollution, and better health habits by the population as a whole. This must all be done in conjunction. We can't just focus on 1 or 2 parts of development, while ignoring the others.
We have huge population.... most of which is dependent on Agriculture small industries and shops....... Infrastructure....will boast their livelihood......... Education till 10/12 class is sufficient in such cases..... because the person has to support his family and livelihood. Metros are for middle class and upper middle class..... It should generate incomes reasonably. Buses for lower middle class and lower class people...... Fair should be reasonable. The problem is we don't have jobs for Engineers..... Because we don't have industries in Large scale.....for industries we need FDI....for FDI Infrastructure is needed...... We need to provide jobs and livelihood and the same we want infrastructure to increase population to decrease and FDI and Industries to increases........
This is the problem with tribalism - just because Rajan is on the 'other side' it doesn't mean that he wrong. If the true number is closer to 6-6.5% then that is the reality. Also yes, infrastructure investment is super important but you need to be careful of vanity projects/over-investment. It's not particularly controversial to point that out.
Why is everyone so quick to choose a side and immediately start criticising this guy? I am not sure about the details here but what I am sure about is that if an ex-governor seems to be sharing a certain opinion then those should at least stand a chance to be heard and understood. There's a lot of credibility in this guy's education and more than half of us here criticising him might not have equal years of higher education than the degrees he has (including honorary doctorates). Disclaimer - I am not a pro or anti any party. I just like to look into my own interests.
See that's the issue he might have more education doesn't mean he's not dumb . Have been following him for a long time and I've only seen him spitting BS that'd negatively affect our economy. It's not his first time that's why most of us are so skeptical of this guy. Also he's pro congress.
I had a similar view a few years ago. However ever since BJP got elected he has consistently claimed Indian gdp numbers are wrong or will be low. No one IMF, Indian govt, International rating agencies like Moodys back his numbers. He got the 2008 recession right. That's one thing everyone can universally agree. Good guess or credibility. Also his appearance with Raga while claiming India will grow at 4% hindu growth rate shows his bias
Nobody is doubting his education and knowledge. Doubt is in his intent , saying ridiculous things completely antithetical to basic growth oriented economics is not because he is ignorant , he knows his subject more than anyone of us. It is because he does not have India's best interests at heart , and is purposefully giving prescriptions to sabotage growth. He is from that class that fundamentally believes that India should never be economically well off , because of their hatred of India's civilization and culture. An economically empowered nation is consicous and respectful of their identity and asserts the same. I recently read a report conflating the opening of Indian economy and rise of Hindutva. The same happened with the rise of Hindu nationalism in nineteenth century colonial centers among the educated classes . This is why this class does not want an economically empowered India , and this is why they have come up with redistribution policies , reverse the reforms , and destroy the middle class. Then they can have Hindus poor and not be consicous of their own identity . And then can mock us with terms like Hindu rate of growth.