Lockdown: Raghuram Rajan willing to work with govt to deal with India's economic crisis

Former RBI governor Raghuram Rajan has indicated his willingness to work with the Indian government if approached for assistance to deal with the economic fallout of the coronavirus lockdown. "The answer is a straightforward yes," Rajan told NDTV when asked if he would return to India if asked for his expertise on economic matters during the pandemic.

"If the virus spreads, as it has spread in Italy and the United States, we have to take it very seriously. What you see in these countries is a tremendous effect on public health, the overburdening of many hospitals and many deaths and of course, when that is happening economic activity is hard to carry on," Rajan said. 

The former RBI governor also noted that the world is "almost surely in a deep recession". "Hopefully, we will see a rebound next year, and it depends on measures we take to prevent a recurrence (of the pandemic)," he said during the interview. "The first sign of difficulties in India is often seen in foreign exchange. So far compared to other emerging markets our exchange rate has stayed quite stable, presumably from some support of the Reserve Bank of India. I should say we have depreciated some against the dollar, but you know countries like Brazil have gone down 25 per cent. We haven't been in that situation," he said.

Rajan, who currently teaches at the University of Chicago Booth School of Business, stepped down after a single term as RBI governor in 2016 after he was constantly at lockhorns with the Central government. It is no secret that he lacked support from then finance minister Arun Jaitley and Prime Minister Narendra Modi. 

During and more so after his term as the RBI governor, Rajan has become a vocal critic of the Modi government's economic policies, including demonetisation.