Rajan was addressing a session on Strategic Outlook for South Asia during which he shared his observation, further claiming that the Indian economy would continue to grow while the growth rate in China is decelerating.
"The two successive shocks of demonetisation and the GST had a serious impact on growth in India. Growth has fallen off interestingly at a time when growth in the global economy has been peaking up," Rajan said.
The disagreements between RBI and the government came out in open when RBI Deputy Governor Viral Acharya in a hard-hitting speech said failure to defend central bank’s independence would “incur the wrath of the financial markets”.
Mumbai/New Delhi, Feb 12 (ANI): Reserve Bank of India (RBI) Governor Raghuram Rajan said that efforts of the federal bank and the government to clean up banks' balance sheets would be successful and warned analysts against "scare-mongering"about the level of stressed assets in the sector. India's banks are struggling under $100 billion of stressed loans, choking the financial system at a time when the economy needs fresh investment to galvanise growth. Minister of State for Finance Jayant Sinha said the government, while working closely with RBI, was supporting the banks fully in terms of both capital as well as necessary policy measures. He also said that they have gone through and done the asset quality review and have identified the full extent of the problem.