(Updates to add Rajan wrote the article before becoming the RBI
governor on Sept 4)
SINGAPORE, Sept 12 (Reuters) - India's slowing economy and
its massive current account and fiscal deficits are not
structural problems and can be fixed with modest reforms, newly
appointed central bank Governor Raghuram Rajan said on
Rajan's commentary on the Project Syndicate website was
dated Sept 11, although it was written before he took office on
Sept 4, according to the site.
Rajan acknowledged in the column that the economy will
expand at a pace that will be its slowest in a decade, with
annual growth this year likely to be between 5 and 5.5 percent.
He also drew an analogy between the current bearishness
towards the country, whose currency has barely recovered from
record lows last month, to the fickle loyalties of Indian
"A few years ago, India could do no wrong.... Today, India
can do no right," Rajan wrote.
Referring to the record current account deficit and slowing
growth, Rajan said those "can all be fixed by means of modest
"This is not to say that ambitious reform is not good, or is
not warranted to sustain growth for the next decade. But India
does not need to become a manufacturing giant overnight to fix
its current problems," he wrote.
He said the slowdown in the economy was paradoxically the
effect of substantial fiscal and monetary stimulus that its
policymakers had injected into its economy in the aftermath of
the 2008 financial crisis.
The resulting growth spurt led to inflation, especially
because the world did not slide into a second Great Depression,
as was originally feared, he said.
"So monetary policy has since remained tight, with high
interest rates contributing to slowing investment and
Economic growth would slow to a 5 to 5.5 percent pace, he
said, adding that was "not great, but certainly not bad for what
is likely to be a low point in economic performance".
For the full commentary, see http://t.co/E57XWxveEq
(Reporting by Vidya Ranganathan; Editing by Kim Coghill)