Global economy risks 1930s-type Great Depression: Rajan - Moneylife

Global economy risks 1930s-type Great Depression: Rajan - Moneylife

My VIEW:

One wishes, those who are managing world’s resources listen
to the concerns expressed by Dr Rajan. In the introduction to his book “Fault
Lines”, Dr Rajan explains the use of the metaphor of fault lines thus:
“In geology, fault lines are breaks in the Earth’s surface
where tectonic plates come in contact or collide. Enormous stresses build up
around these fault lines. I describe the fault lines that have emerged in the
global economy and explain how these fault lines affect the financial sector.”
Quoted this, to flag the clarity of the teacher in Rajan in
explaining the multi-dimensional economic riddles bothering governments,
planners, economists and other stakeholders at this crucial stage of economic
development and the acceptability of his suggestions.
Dr Rajan concluded his postscript to the book with the
following observation: “We have uncovered deficiencies, and we know that the
system has little capacity to sustain a repeat. We will bicker, no doubt, and
we will try easy options. But eventually, as we realize that there is no
alternative to addressing our real problems, democratic debate, coupled with
human ingenuity, will come up with widely acceptable solutions to our problems.
We may not see those solutions now, but so long as we are aware of the problems
we have to solve, and work on them, I have no doubt that solutions will
emerge.”


The optimism about India expressed in the chapter “Afterword:
What Lies Ahead for India” explains why Dr Rajan is in India today. Destiny has
now positioned Dr Rajan in a slot from which he will be able to contribute
towards realising his vision. Let us wish, Reserve Bank led by Dr Rajan will
guide Indian financial sector to play the proactive role in the country’s
growth story, making this decade special for all Indians.
M G Warrier

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