The Covid-19 outbreak is probably India’s greatest challenge since Independence, former RBI governor Raghuram Rajan said on Saturday, adding that in many places the government was “not present to help the people”.
“This is a tragic time in India given the pandemic. The Covid-19 pandemic is probably India’s greatest challenge since Independence,” Rajan said, addressing a virtual event organised by the University of Chicago Center in Delhi.
“When the pandemic hit first, the challenge was largely economic as a result of lockdowns. Now the challenge is both economic and personal, and there will also be a social element to it as we go forward.”
He added: “One of the effects of the pandemic is, we don’t see the government presence for various reasons.”
Noting that the Maharashtra government was able to provide oxygen beds to Covid-19 patients, he said: “In many places that level of the government was also not working.”
Rajan said: “I do hope (that) as this pandemic passes, we recognise that there are situations where government breaks down. The pandemic has shown that we are all connected. No man is island, no woman is island.”
Rajan, a professor at the University of Chicago Booth School of Business, said governments need to adjust and course-correct and this can be done in a polite way.
“But enough people within the government and outside government have to speak up, otherwise we get a disaster,” he said.
Rajan said that sometimes one needed to reform not by stealth but in full openness.
He added that India needed a quick bankruptcy process for the MSME sector.
Rajan, who was RBI governor from September 2013 to September 2016, recalled his famous IIT Delhi speech of October 2015, delivered in the middle of the “intolerance” debate in the country, which was seen by many as a criticism of the Narendra Modi government.
“My IIT Delhi speech was not a criticism of the government.... Things get over-interpreted sometimes,” he said.