Implementation is the biggest challenge for Indian economy: Raghuram Rajan

Raghuram Rajan said there is only one thing that is hindering the growth of Indian economy. Implementation is a major challenge and if it can deliver on its promises, the country will be "the place to be", Reserve Bank of India Governor Rajan has said.

"The gap in India has always been between the promise and the execution," he said.

"If anybody was to look towards a big source of demand in future it would be hard for them to miss India," he said, adding, "If our implementation matches our promise, I have no doubt that in the next five or 10 years this will be the place to be - so good to get in early."

Mr Rajan told Australia's Sydney Morning Herald that he believes the "implementation gap" which had plagued India in the past is narrowing.

"I would argue that because of the common language - different accents but common language - I think there could be a lot going on there," the central bank chief said.

Mr Rajan praised the role of Australia's Productivity Commission in developing economic policy.

"Clearly there is a lot to learn about how you have used the intellectual inputs, the economic inputs, from that kind of organisation."

"There are so many places two large economies can learn from each other," he added.

When asked about Australian companies, like ANZ and Telstra, which have made promising investments in India in recent decades only to retreat at great cost, Mr Rajan said, "I'm not sure it's anybody's fault - there have been periods of strong growth and there have been periods where people have thrown in the towel and said it is impossible doing business."

Mr Rajan said India needed to improve its infrastructure, human capital (knowledge base of the population), regulations and access to finance.

When asked whether he was to consider a leadership role at the International Monetary Fund (IMF) in future, Mr Rajan said, "I haven't even thought about that. The problems here (in India) and the immediacy of dealing with them is so much more interesting at this point."

(Image credits: indiatimes)