RBI Governor defends Modi Government, says expectations were ‘probably unrealistic'

RBI Governor Raghuram Rajan has said the Modi government has taken effective steps to create a favorable situation for investment in India. He added the current Prime Minister’s image was like "Ronald Reagan on a white horse", who can butcher all market problems. That is unacceptable.

Rajan's remarks come as the new government completes one year in office this May. It won the elections primarily due to the vote of the upwardly mobile class who demand jobs, lower prices, more development and lesser corruption.

The RBI Governor said the government would take better tax decisions. Corporate tax is estimated to come down 1% every year. Such steps will inspire confidence among investors. He observed that inflation has come down significantly in India, and the rupee has stayed ‘relatively flat’. The Current Account Deficit is also estimated to drop to 1.5% this year. That’s a healthy sign as the government can now shift focus to growth.

Rajan said the Goods and Services Tax (GST) bill should have been passed in the recently concluded Parliament session. However, he expects it to be effective by March 31 or April 1 next year. He also stressed on the importance of the Land Acquisition Bill.

He said that the speed of these developments could have been faster.

(Image credit: Indiatimes)