Job market in India needs boost: Raghuram Rajan in Davos

Former RBI Governor Raghuram Rajan on Tuesday lauded the Modi government for doing a lot of good work on the infrastructure front in India and hoped there would be some concrete steps in the upcoming Budget to boost the job market. Speaking at a session on the US dollar here at the World Economic Forum Annual Meeting, Rajan also said the depreciation in rupee to near Rs 85-level against the US dollar is more because of the strengthening of the American currency rather than any domestic factor.

The Modi government has done a lot of good work on the infrastructure front but the other key pillar that needs to boost consumption is the job market, he said.

India is growing at 6 per cent, which is actually great but when we look at per capita figures, it needs to grow much faster, Rajan said.


There is an urgent need to boost the job market, he said, adding, "a Union Budget is due in the next few days and hopefully we will see something there".

When people talk about US dollar remaining supreme in the next 25 years, it is certainly based on expectations that the world will remain united, he said.

When people talk about a non-central bank digital currency gaining ground as a widespread means of payment, a key concern among central banks especially outside North America and the Euro bloc, it is a fear of weaponisation, he added.

If you are in an emerging market, you are really worried about dollar. I won't comment on what is the real rate, but there are concerns, Rajan said.

Central banks of many emerging markets are being forced to intervene to arrest decline of their currencies against dollar but the point is they should not as it's not their fault, he said.

Rajan also ruled out any immediate possibility of a common currency for BRICS grouping.

"For BRICS to have a common currency, we need to sort a lot many geopolitical issues. There are concerns between India and China, while other members have separate issues. I don't see that happening anytime soon," he added.