Developing infrastructure, improving the quality of human capital, optimum regulation for good business, and extensive financial sector reform should be the next steps for improvement and development of the Indian economy, Raghuram Rajan said. Rajan was speaking at an event hosted by the Consulate General of India in New York in collaboration with the India-America Chamber of Commerce on Oct. 8.
Rajan encouraged the audience to get involved in the “nitty gritty of the implementation process” and assured them that it was not difficult, especially given the Indian government has the political will to reform. “Now is a good time to invest in the Indian economy,” he noted.
Rajiv Khanna, president of the India-America Chamber of Commerce intruducedthe governor before Rajan spoke, followed by an e Q&A session, a consulate press release said.
“Over the years, India has outgrown its institutions,” Rajan said, adding, that such institutions only worked well when we had the practice of resource allocation, which was a source of revenue. “This was a time when coal could be extracted from the ground with your bare hands,” he said.
Our economy can no longer work with this model, he said, and just as there were drastic democratic changes that reacted to the economic slump in the past decade, institutions also have reacted. Rajan emphasized on the need to convert talk about change into delivering and implementing reforms.
He made three crucial recommendations to creating a more investment-friendly market in India: (1) stalled projects needed to get back on track, and that clearance granted at the capital should be effective on the ground; (2) the complex labor laws needed to be improved to benefit both employers and workers; and (3) promotion of self-certification to eliminate the stressful and cumbersome process of inspections.
This story originally appeared on News India Times.
