Rangarajan: 1991 Reforms Brought Outside Economists Into IAS Bureaucracy
Dr. C. Rangarajan · Dr. C Rangarajan on Dr. Manmohan’s Legacy, 1991 Reforms & Future Economic Plans I The Neon Show · Feb 9, 2024 · at 51:15
Former Reserve Bank of India Governor Dr. C. Rangarajan reflects on how India's 1991 economic reform team was assembled across technocrats and civil servants.
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“Somewhere around that time, it was decided that the government will also take in people from outside who are competent into the system. Essentially, the government, the was run by the bureaucrats. Particularly the civil servants, the IAS officers, and other similar officers. But from time to time, they decided that it is good to get people from outside and make them part of the system.”
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More from Dr. C. Rangarajan
Rangarajan: India never sold gold in 1991, only pledged it as collateral
“We never sold gold. We only sent out gold To be used as a security akin to which we borrowed. And as soon as we repaid that thing, the gold became ours. There was no idea at any time to sell gold, to only to pledge gold and the pledge of gold borrow money.”
Rangarajan: AI replacing intellectual labor could reduce overall human labor demand
“The AI and generic AI and other things are essentially substituting not the manual labor, but even the intellectual labor. That imposes, that creates a situation in which the demand for human labor itself could go down.”
Rangarajan: Pure export-led growth is no longer viable for developing economies
“Some people say that South Korea and even China moved fast because they focused on exports. That is true. But that is no longer possible when even the developed countries are not going to grow fast. And the attitude in the developed countries is also changing …”
Rangarajan: Bank of England and Bank of Japan required gold shipped out of India
“And then we found out that the Bank of England and Bank of Japan were willing to give us a loan. But then they insisted that the goal Should come out of India.”
Rangarajan: 1991 Rupee Devaluation Was Carried Out by RBI, Not Government
“Another important thing which many people may not have noted, but I have indicated in the book is, this devaluation of the rupee was not done by the government. It was done by the Reserve Bank.”
Rangarajan: India needs a 35% investment rate for 7% annual growth
“I would really think that even though we may not achieve exactly the developed country status, we need to grow at least at about seven percent per annum. And if the incremental capital output ratio is five to one, then the investment rate has to be at 35%.”