Raghuram Rajan’s bitter medicine for India: ‘Sell PSUs now, don’t wait, stock market is buoyant’

Raghuram Rajan also suggested the government to take the advantage of the recent surge in markets and called out for the fast-track process in PSUs

As the number of coronavirus cases rose, India overtook Russia and now has the third-largest number of cases, after the US and Brazil, in the world. Former Reserve Bank of India governor, Raghuram Rajan on Wednesday said that this number will keep on increasing until this pandemic is contained, which will pose a lot of uncertainty for the businesses. Raghuram Rajan questioned the statements which claimed that India has bent the curve. “We haven’t bent the curve. We need to bring the number of cases down on a reliable basis until we do that, we cannot rest. We have to bring it down to a low number so that we can actually start testing, tracking, and containing it,” Rajan said in an interview with CNBC TV18.

Apart from talking on containing the virus, coming out with a COVID-19 vaccine and batting for the inclusion of professionals like KV Kamath into the government, Raghuram Rajan also suggested the government to take the advantage of the recent surge in markets and called out for the fast-track process in PSUs. “I think the government has talked about reforms. Certainly, the reforms in the agriculture sector look promising if they are carried out, but there are other reforms which have been promised, what has happened?,” questioned Raghuram Rajan. “You said the stock market is buoyant, why aren’t we selling public sector firms at this point? Are we waiting for the stock market to come down to start selling more?,” Rajan questioned the government.

On the privatisation front, Rajan raised a question asking while the government talked about privatisation, why it has not utilised these 4-5 months in preparing the entities which can be privatised. “Why haven’t we spent these 4-5 months preparing the entities to be privatised and to sell them so that we can have more resources to spend on repairing the economy,” Rajan said.

In order to bring the virus down, Rajan said we need to look around the world, especially the emerging and developing world. “What has worked there, why has Ethiopia got a low number of cases, why did Vietnam work and figure out from that what seems reasonable responses in order to bring the virus down significantly from where we are,” he added.

While talking about how India can design a macro-economic policy, Rajan said that India first needs to get its medical policy right. “I understand the enormous efforts going about, the brave warriors such as doctors, and healthcare workers, fighting the COVID-19 pandemic from the front lines, but that is not sufficient. India now has the third-largest number of coronavirus cases in the world,” he emphasised. He also said that as the number of cases is increasing and until we contain it, it is going to be very hard to open up.