RBI Governor Raghuram Rajan expressed his concern over central banks globally pushed into “competitive monetary easing”.
Rajan said lower interest rates and tax incentives can boost investments, but the demands of the consumers is important, it holds the key for pushing economic growth.
Speaking on the issue of ‘Going Bust for Growth’ in New York, Rajan said, “The current non-system in international monetary policy is a source of substantial risk, both to sustainable growth as well as to the financial sector. It is neither an industrial country problem, nor an emerging market problem. Collective action is required.”
Rajan said that emerging markets have a clear need for infrastructure investment, as well as growing populations that can be a source of final demand.
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