Raghuram Rajan, former Governor of the Central Bank of India, assesses the economic reforms undertaken by Indian Prime Minister Narendra Modi. Rajan points out that Modi, no longer having an absolute majority, now has to form alliances, which requires a broader consensus to move reforms forward.
Rajan also discusses the socio-economic challenges facing India, including rising unemployment among young graduates and growing insecurity among low-income households. He criticises the government's focus on large capital-intensive companies at the expense of small and medium-sized enterprises. In his view, greater attention to the latter could stimulate consumption and economic growth.
Finally, Rajan discusses the impact of the election on foreign direct investment (FDI) in India. He notes a recent decline in FDI despite India's attractiveness as an alternative to China. He believes that a more democratic India could boost foreign investors' confidence in the country's political and institutional stability, which is essential for attracting and maintaining long-term investment.
Bloomberg TV provided by MT Newswires
