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Niti Aayog VC Blames Former RBI Governor Raghuram Rajan For Economy Slow Down

JAVED SAIFI | 0
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| September 3 , 2018 , 17:35 IST

In an interview with ANI on Monday, the Niti Aayog Vice Chairman Rajiv Kumar blamed former Reserve Bank of India Governor Raghuram Rajan over slowed down economy in the days that followed demonetisation.

Kumar said, “Rajan’s policies on non-performing assets (NPAs) led to the slowdown in the economy, not demonetisation.”

"This is a completely false narrative and I am afraid as leading people like Chidambaram and our former PM added to this," he added.

Elaborating further Kumar said, “NPAs rose to Rs 10.5 lakh crore by mid-2017 from Rs 4 lakh crore due to Rajan new mechanisms to identify stressed NPAs which is why banking sector stopped giving credit to the industry.”

Also Read: MSMEs Sector Witnessed Shocks Of Demonetisation And GST, Says RBI Report 

“Especially in the case of small-scale business, their credit actually shrank. There was a negative growth in the years. Even for the large industries, their growth shrank to 1.5 percent to 2 percent and in some quarters even negative,” he added.

Notably, India economy post demonetisation was facing huge stress and was growing at 6.1 percent rate in the fourth quarter of the fiscal year 2016-17 that continued to Q1 in the fiscal year 2017-18 with economy growing at 5.7 percent rate.

Previously Rajan had been asked by a parliamentary committee headed by BJP leader Murali Manohar Joshi to appear before it and brief on mounting non-performing assets (NPAs).