Rajan warns against 'euphoria' over fastest-growing tag

Warning against being "euphoric" about India being the fastest-growing economy, RBI Governor Raghuram Rajan today sought to contextualise his "one-eyed king" remarks about India's growth and said the country has a long way to go before it claims to have arrived.

"As a central banker who has to be pragmatic, I cannot get euphoric if India is the fastest growing large economy," he said.

Seeking to explain his 'one-eyed king' comments, Rajan said his comments were "hung out to dry out of context" and even offered an apology to the visually-impaired for hurting them by the use of the proverb.

Stating that the per-capita income of Indians remains lowest among BRICS, Rajan said, "We have a long way to go before we can claim we have arrived. We need to repeat this performance (economic growth) for 20 years before we can give each Indian a decent livelihood."

He also said India's global reputation holds great promise, but is seen as a country that has under-delivered and that it should "implement, implement, and implement" the structural reforms.

Speaking at the convocation of National Institute of Bank Management, Rajan said India is yet to achieve its potential growth though it is on the cusp of that and a substantial pick-up in growth can be achieved with pending reforms.

Making a reference to his last week's interview to a foreign publication where he likened India being the fastest-growing major economy to a case of the one-eyed man being king in the land of the blind, Rajan said his comments were interpreted as having denigrated the country's success rather than emphasising on the need to do more.

"... Every word or phrase that a public figure speaks is intensely wrung out of meaning. When words are hung out to dry out of context as in the newspaper headline, it only becomes a fair game for anyone who wants to fill in, meaning to create mischief," he said.

Finance Minister Arun Jaitley had rebutted Rajan's remarks, saying compared with the rest of the world, the Indian economy is growing much faster and, in fact, the fastest.
Commerce Minister Nirmala Sitharaman too had not taken Rajan's remarks lightly, saying better words should have been used.

Rajan today said commonly used words or proverbs can "most easily and deliberately be misinterpreted".

"If we are to have a reasonable public dialogue, we should read words in their context, not stripped of it," he said.

He, however, apologised to the visually-impaired whose association had criticised Rajan for using the proverb.

"I do want to apologise to a section of the population that I did hurt with these words, that is the visually impaired, or the blind," Rajan said.

Queried for his take on India being the 'bright spot', Rajan during last week's interview had said: "I think we have still to get to a place where we feel satisfied. We have this saying 'In the land of the blind, the one-eyed man is king'. We are a little bit that way."

Rajan further said: "We are often compared with China but the Chinese economy, smaller than us in the 1960s, is now 5 times our size. The average Chinese citizen is over four times richer than the average Indian".

But the Governor was quick to add that this was not to disparage what has, and is, been done. "The Centre and states have been creating a platform for strong and sustainable growth, and I am confident the payoffs are on their way, but until we have stayed on this path for some time, I remain cautious."

Stating that he was misunderstood with his usage of the phrase 'andhon mein kanha raja'...('In the land of the blind, the one-eyed man is king') he said he "used the phrase andhon mein kanha raja...which the proverb has a long, multinational history."

The RBI Governor added: "My intent in saying it, and it was an off-hand comment, was to signal that our outperformance was accentuated by the world's weak performance. But we are still hungry for more growth. I then explained that we are not yet at our potential, though we are at the cusp of a substantial pick-up in growth given all the reforms that are underway."

Calling for a culture of better and more rational public dialogue, he said, "but few read beyond the headlines. The interview became moderately controversial, with the implication that I was denigrating our success rather than emphasising that we need to do more."

Rajan's comments had created some uneasiness in the government with Jailtey asserting that the Indian economy is the fastest growing large economy in the world.

The Finance Minister also forecast a 8-8.5 per cent growth this year if the monsoons are normal.