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I came from USA to India for notes change during demonetisation: Raghuram Rajan

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New Delhi, Sep 8: Raghuram Rajan, former Governor of the Reserve Bank of India says he was open to staying on as Governor but the “government did not grant me contract.”

He also said if unprepared, the notes ban can have a chilling impact on the economy. “I conveyed my notes ban concerns to those that mattered.”

Following are the highlights of Raghuram Rajan’s interview with NDTV:

He was asked that as a RBI governor two-year extension was offered, he denied and said they just had to plan it, that’s all and I had a three-year term and the term came to an end. If there had to be an extension, there had to be an agreement with the government but there wasn’t.  The government did not offer me a new contract and that’s where it ended.

When asked was RBI keen to have you back, he replied I am the wrong guy to ask (this). I cannot go into the details of our discussion but there was no agreement in the end.

He said if you’re not prepared on Day 1 with all the currency that’s being replaced – currency is important for economic activity – you will have a chilling of economic activity. You would see a dramatic slowdown of economic activity on the note ban issue.

His opinion on notes ban achievement, “There is the question of whether you can catch the guys that you want to catch and do they find ways around it. I think the worst possible combination of circumstances will be where you don’t catch the guys but you still have the effects on economy.”

‘Indians are good at Jugaad’. “In India working people have coined the word jugaad. We’re pretty good at jugaad. So if you know India well you should recognise that a lot of Jugaad happened – people will find ways around it. Its economic arbitrage with a touch of illegality about it.”

In the interview he was asked on many critical issues:

On the notes ban process

What we have said in the book that after we gave our note, a committee was set up and started the process of discussion. In my view, it never came back to us that here is a decision that you’ve to make or here’s the timing we want to do this scheme.

On new notes

We had started the process of designing the new notes. The new notes – 2000, 500 and a new 1,000 – had been approved in May. To say none (of notes ban prep) was done would be incorrect. But a monetary economist would’ve liked for all the notes to replaced at one go.

We don’t yet know the full effects of demonetisation. Based on information that we have now, ignoring future dividends, the answer is fairly obvious. (no)

On Aadhaar Cards

“I like the process of getting everybody to sign on to their accounts with the Aadhaar number.”

On Gauri Lankesh murder

It’s very unfortunate that a journalist – or anybody – be killed. But it’s too early to draw conclusions. We have to be vigilant that we don’t narrow the space for discussion but let us not worry that the country is going towards only one direction.

Raghuram Rajan on trolls

“We should not let our dialogue be governed by the idiocracy”.

On Indian economy

Efficiency of economic system breaks down with protectionism.

“One of the reason for the rise of populist nationalism is because of a sense of victimisation among the majority community. This leads to long term problems for the economy.”

Wefornews Bureau

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Sensex at 34,458.86, down by over 500 points

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SENSEX NIFTY MARKET

Mumbai, Dec 11 : The key stock exchanges had a gap-down opening on Tuesday, with the S&P BSE Sensex losing over 450 points as investors were spooked on the surprise resignation of RBI Governor Urjit Patel on Monday.

Further, early trends of the Assembly election results in five states which showed a neck and neck fight between the Bharatiya Janata Party (BJP) and Congress in at least three also weighed on the sentiments.

At 9.16 a.m., the Sensex traded at 34,502.62 points, lower by 457.10 points or 1.31 per cent from the previous close.

It had opened at 34,584.13 against the previous close of 34,959.72 points on Monday.

The Nifty50 on the National Stock Exchange traded at 10,346.90 points, lower by 141.55 points or 1.35 per cent from the previous close.

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CFO arrest row: China denies Huawei poses security threat after EU warning

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huawei

Beijing, Dec 10: China on Monday strongly defended Huawei after a warning from the EU that the tech giant posed a security risk, amid an ongoing row over the arrest of its Chief Financial Officer (CFO) in Canada at the behest of the US.

In response to accusations by European Commission Vice President Digital Single Market Andrus Ansip, Chinese Foreign Ministry spokesperson Lu Kang said the government had never forced Huawei to install a covert access route on mobile phone units to control them.

“I want to emphasize that Chinese laws and regulations don’t allow any institution to force any enterprise to install a ‘backdoor’. The Chinese government always encourages its companies to abide by local laws and regulations,” Lu was quoted as saying by Efe news.

He reiterated Beijing’s demand of an immediate release of Huawei’s CFO Meng Wanzhou who was arrested in Vancouver on December 1 after the US accused the tech giant of selling equipment in Iran in violation of American sanctions.

Meng, who is also the daughter of the group’s founder and CEO, had a bail request rejected on Friday by a Canadian court.

EU’s Ansip said on Friday that the bloc should be “worried” about Huawei and other Chinese companies over the security risks they pose.

Ansip claimed that China was developing mandatory “backdoors” — malicious software that allows any phone unit to be accessed and controlled without the user’s knowledge.

In response, Lu said it was “ridiculous” to undermine the company based on “speculations”.

“We have noticed some people from certain countries keep saying that Huawei may threaten their national security. But they did not provide a single evidence,” the spokesperson said.

He stressed that the company had “won the trust of its partners” and signed agreements to build 5G networks with more than 20 countries, including Portugal, France and Germany.

The spokesperson also commented on Japan withdrawing Huawei and Chinese telecom giant ZTE from the government procurement list, due to alleged security breaches by the two firms.

“The Japanese Chief Cabinet Secretary (Yoshihide Suga) said the relevant regulations don’t aim to exclude the relevant enterprises or equipment. I want to stress that Chinese enterprises and cooperation in Japan is for mutual benefit,” Lu said.

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Sensex nosedives over 700 points, Nifty ends below 10,500 mark

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SENSEX-

Mumbai, Dec 10: The Indian equity market slumped around two per cent on Monday, with the S&P BSE Sensex shedding over 700 points, tracking a similar sell-off globally along with uncertainties over the upcoming results of the recently held state elections.

The Nifty50 on the National Stock Exchange fell below the 10,500 mark and the Sensex ended below the psychologically significant level of 35,000 points.

On the domestic front, the results for the recently held assembly elections of five states would be out on Tuesday. Exits polls last week showed that the party in power — the Bharatiya Janata Party — is seen facing a tough challenge which has raised concerns among the investors.

The elections are considered a crucial indicator of public mood before the Lok Sabha elections in 2019.

In the global markets, crude oil prices rose on Monday after the Organization of Petroleum Exporting Countries and Russia on Friday agreed to reduce supplies from January 2019.

Further, there was a spike in trade war concerns after China on Sunday summoned US Ambassador Terry Branstad over the US arrest warrant for Huawei’s global CFO Meng Wanzhou who was taken into custody in Canada last week.

Index-wise, wider Nifty50 of the National Stock Exchange (NSE) closed lower by 205.25 points or 1.92 per cent to 10,488.45 points.

The barometer 30-scrip Sensitive Index (Sensex), which opened at 35,204.66 points, closed at 34,959.72 points — lower by 713.53 points or two per cent — from its previous session’s close of 35,673.25 points.

It touched an intra-day high of 35,246.97 and a low of 34,915.77 points.

“Our markets have fallen in line with other global markets which were down due to resurgence of US-China friction and rise in crude prices,” HDFC Securities’ Retail Research Head Deepak Jasani told IANS.

On the currency front, the Indian rupee weakened to 71.38 against the US dollar from its previous close of 70.81.

“Dollar-rupee opened higher, around 71.35 on spot, after exit polls suggested that BJP may lose three major states,” said Anindya Banerjee, Deputy Vice President for Currency and Interest Rates with Kotak Securities.

“If exit polls are true, then it can increase the political risk premium on the rupee.”

Last Friday — the previous trade session — bargain hunting and lower crude oil prices lifted the key Indian equity market indices by around one per cent.

Consequently, the NSE Nifty50 had ended higher by 93 points or 0.87 per cent at 10,693.70 points, whereas the Sensex closed at 35,673.25 points, up 361.12 points or 1.02 per cent.

IANS

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