Reserve Bank of India Governor Raghuram Rajan has warned against crony capitalism that creates said oligarchies and slows growth. “One of the greatest threats to the growth of developing countries is the middle income trap, where crony capitalism creates oligarchies slowing growth. If the debate during elections is any indication, this is a very real concern public in India today”,Rajan while offering the Lalit Doshi Memorial Lecture in Mumbai said Monday.
Whether the Recent Election had replaced Buddy socialism?
The last general election was filled with allegations of links between politicians and business groups. Rajan extolled the virtues of democracy in India before turning to its darker aspects. “An important question was whether the recent election had replaced Buddy socialism of the past with crony capitalism, where presumably the rich and influential have received land, natural resources and spectrum in exchange for bribes to venal politicians. Killing transparency and competition, crony capitalism is bad for free enterprise, opportunity and economic growth. replacing special interests and the public interest, which is detrimental to the democratic expression. If there is any truth to these perceptions of capitalism friend, a natural question is why people tolerate. Why vote for the venal politician who perpetuated?
Rajan continued, “A widespread assumption is that our country suffers from lack of ‘a few good men” in politics. This view is unfair to many people raised in politics. But even assuming that is true, occasionally we see the emergence of a group, usually upper middle class professionals, who want to clean up politics. But when you are ‘good’ people to stand for election, they tend to lose their deposits. Is the electorate really do not want squeaky clean government?
“Apart from the assumption that high morale are only the upper middle class, the error in this assumption may be in the belief that the problems stem from individual ethics, rather than the system we have. In a speech I delivered at the Chamber of Commerce of Bombay in 2008, which argued that the tolerance for the venal politician is because he is the crutch that helps the poor and disadvantaged to navigate a system that gives them so little access. Perhaps this is why survives “.
The warning from the governor against crony capitalism and oligarchy is a reiteration of his remarks four days before the collapse of Lehman Brothers in 2008 in a speech in the House of Bombay, Rajan had emphasized that India had the largest number of billionaires per trillion dollars of GDP, after Russia. NR Narayana Murthy while excluding, Azim Premji and Ratan Tata as ‘deservedly respected’, Rajan said “three factors – land, natural resources and government contracts or licenses – are the predominant sources of wealth of our billionaires Y all. these factors stem from