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Raghuram Rajan assures India’s economic reforms are in right direction

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Davos: Referring to some of the obsolete regulations that are currently in place, RBI Governor Raghuram Rajan said, “Economic reforms in India are going in the right direction but the level is wrong.”

In a television interview, Rajan said, “Well let me put it this way, the direction is the right one but the level is wrong. We have too much of the wrong kind of regulation.”

“So we do need to hack away at this, and it will take time, it doesn’t happen overnight. We are doing it and do recognise that we overregulated. That business needs a better environment,” he observed.

“At the same time, there is a whole set of new business coming in that we have to find ways to deal with an example, online lending. How do we do with what happens in a downturn?” Rajan said.

He was responding to a question on economic reforms in the country.

Rajan bitterly regretted that people tend to talk only about big ticket items, but not the other reforms that are currently being undertaken.

“Well, I think one tends to focus on the big iconic items like in India there’s now a goods and service tax which is likely to unify the country. That’s stuck so far in some Parliamentary discussion between the opposition and government. Hopefully, it will be done sooner rather than later. But really there’s a lot going on the ground which is less obvious, “he said.

“For example, last week the Prime Minister inaugurated a programme called ‘Start Up India’ which is about really eliminating the bureaucratic hurdles of starting a new business. New business had to register with 10, 15, 20 different authorities including the pension fund,” Rajan said.

“You have one employee why do you need a pension fund at this point? So the idea here is to make it simpler to start, but also remove the inspections. For three years no inspectors would show up. You self-certify what you did,” he said, adding that these kinds of reforms are really building on each other.

“And there’s a very vibrant private sector in India also which is taking off. Internet market places, fantastic new development because what India doesn’t have is cheap land. You can’t build retail stores everywhere.

“But if you build a virtual warehouse with warehouses performing the role of you now, storing goods. You can connect small town households to the big market. And you can connect small town manufactures again to the big market,” he said.

Responding to another question, Rajan said he is not worried about Chinese economic slowdown.

“In terms of the quantity of growth, there’s still a lot of growth coming from China in terms of dollars. Of course, percentages are falling all the time. That is natural to be expected of an economy which is growing richer and therefore which is going to slow,” he said.

“So I’m not excessively worried about Chinese growth,” Rajan said.(Inputs from agencies)

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PNB says no “cash shortage” in its ATMs

Finance Minister Arun Jaitley sought to allay fears amidst reports of a cash crunch and empty ATMs in the country

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PNB: No cash shortage in ATMs. Wikimedia Commons

State-run Punjab National Bank (PNB) on Wednesday said there is no “cash shortage in its ATMs across the country.

“Overall, Punjab National Bank has not faced any cash shortage in its ATMs across the country and continue to function as usual,” the state-run lender said in a statement. “Out of 9,679 PNB ATMs, there is a 90 per cent availability of ATMs which is normal.”

PNB denies claims of cash shortage.

On Tuesday, Finance Minister Arun Jaitley sought to allay fears amidst reports of a cash crunch and empty ATMs in the country by stating that “there is more than adequate currency in circulation”, even as the government blamed “unusual demand” for shortages in some areas.

Also Read: PNB scam: Additional Rs 1,300 cr fraud revealed

Besides, the central government announced that it has decided to increase printing of Rs 500 notes by five times. In addition, the Reserve Bank of India (RBI) said that it is “taking steps to move currency to areas” which have witnessed unusually large cash withdrawals.

“The shortage may be felt in some pockets largely due to logistical issues of replenishing ATMs frequently and the recalibration of ATMs being still underway. RBI is closely monitoring both these aspects,” the RBI had said in a statement on Tuesday. “Further, as a matter of abundant precaution, RBI is also taking steps to move currency to areas which are witnessing unusually large cash withdrawals.” IANS

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