Ex-RBI governor strikes back against RSS-linked magazine's attack on Infosys

New Delhi: In response to the RSS-backed Panchajanya magazine's attack which called IT major Infosys 'anti-national', former RBI governor Dr Raghuram Rajan struck back on Tuesday asking if the Central government would be dubbed anti-national for its alleged poor performance initially on the Covid vaccination front.

"It just strikes me as completely unproductive. Would you accuse the government of being anti-national for not doing a good job on vaccines initially? You say it is a mistake. And people do make mistakes," Dr Rajan said, during an exclusive interview with NDTV.

In its latest edition, RSS-affiliated weekly magazine Panchjanya carried a four-page cover story on Infosys 'Saakh Aur Aghaat' (Reputation and Damage) in which it questioned software major's functioning and accused it of funding "anti-India forces" and messing government portals operated by it.

The renowned economist, now a teacher, cited the creaky rollout of the goods and services tax (GST) as an example and asked to learn from those mistakes and not to use it as a club to roll out one's own prejudices.

He, however, agreed there was a "reasonable recovery" on the industrial side. Asia's third-largest economy grew by a record annual pace of 20.1 per cent last quarter, driven by a surge in manufacturing and a strong rebound in consumer spending.

He further pointed to a shift in the economy: larger, more formal firms are experiencing significantly more profit growth as compared to the smaller firms, even among the listed firms.

This, he said, is one reason why the stock market is doing so well and also why tax collections are increasing -- GST collections jumped 30 per cent annually to ₹ 1.12 lakh crore in August.

He also took note that India haven't supported small and medium businesses to the extent that other countries have and said that the country is seeing a forced formalisation of the economy.

He also said that the rising revenues aren't being shared with the state governments and added that the Centre has swallowed up a significant part of the revenues through central cesses.

"India is getting too big to be run exclusively from the Centre. And that too not just from the Centre but from the 'Centre within the Centre'. This kind of over-centralisation holds us back."

Decisions, he said, aren't being made until very late. On this front, he cited the example of appointing CEEx-Os of government banks.

"This is suggesting that the government is overwhelmed...Too many people are looking to the Centre for guidance and not getting it. As a result, we get paralysis," Dr Rajan said.

Referring to the effect of a stuttering economy on people, he pointed to the reported increase in gold loans -- people in India, he said, sell their family gold only when in dire straits -- and the marginal fall in consumption.

To alleviate their condition, he recommended cash transfers. Highlighting the Mahatma Gandhi National Rural Employment Guarantee Act as a cash-transfer scheme of sorts for villages, he said something similar is needed for urban India.