Crony capitalism hampers economic growth: Raghuram Rajan

Posted By: Religare
Subscribe to GoodReturns
For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

    Crony capitalism hampers economic growth: Raghuram Rajan
    Reserve Bank Governor Raghuram Rajan came out strongly against "crony capitalism", saying it kills transparency and competition and hence is harmful to free enterprise, opportunity and economic growth, reported PTI

    "By killing transparency and competition, crony capitalism is harmful to free enterprise, opportunity, and economic growth," Rajan said, delivering a public lecture instituted in the memory of noted bureaucrat Lalit Doshi here this evening.

    The academic-turned-central banker also noted that "crony capitalism, where the rich and the influential are alleged to have received land, natural resources and spectrum in return for payoffs to venal politicians" was a major issue in the recent elections.

    He further said that one of the greatest dangers to growth of developing economies like India is the middle income trap where crony capitalism "creates oligarchies that slow down the growth."

    The only way of avoiding this trap is to strengthen public services, especially those for the poor, he said, adding that financial inclusion drive of the government and RBI is a a key initiative in the same direction.

    "Financial inclusion and direct benefits transfer can be a way of liberating the poor from dependency on indifferently delivered public services, and thus indirectly from the venal but effective politician," he said.

    Rajan also said that people tolerate crony capitalism and vote for "a venal politician" who perpetuates it because the politician "is the crutch that helps the poor and underprivileged navigate a system that gives them so little access".

    The solution to this problem lies only in making the system more efficient, he said.

    Read more about: reserve bank raghuram rajan
    Company Search
    Enter the first few characters of the company's name or the NSE symbol or BSE code and click 'Go'

    Find IFSC

    Get Latest News alerts from Goodreturns

    We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more