Raghuram Rajan on wealth distribution: 'Elevate, rather than bringing the successful down'

Raghuram Rajan, former Reserve Bank of India (RBI) governor said that having inclusive growth will increase the pace of growth but taxing the rich is not the way to do that. Speaking at an event at the Kellogg School of Management - Northwestern University, he said, “We need to try and elevate rather than bringing the successful down.”

Former Governor of Reserve Bank Of India (RBI) Raghuram Rajan shared his views on wealth distribution.

The remarks come after Indian Overseas Congress chairman Sam Pitroda earlier said that the inheritance tax in the US is an idea that could be debated and discussed in India as well.

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Raghuram Rajan on wealth distribution idea

Raghuram Rajan said, “I'm not the opposition. I like to emphasise that and I'm an academic, and academics have a duty to criticise what? They don't see us working well, both sides, right? So that's what I do. Uh, look, I think we need to figure out how we get the people who are not doing well to actually do better and that will increase growth. Having inclusive growth will actually increase the pace of growth. And I'm not saying we should, you know, tax the wealthy to a huge extent or anything of that sort.”

Raghuram Rajan on Indian economy

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He also asserted that there needs to be a thorough examination of the parts of the economy that have not benefitted or have suffered a K-shaped recovery.

He said, “But I think we need to examine how we can get the part of the economy, which is not benefitting right now, which has suffered a K-shaped recovery. You can't deny that when you look at the numbers since the pandemic, how do we get them flourishing? Because the cost of not doing that is first wasted resources. We have so many mines which are not contributing to India's growth, but more important is it could lead to more social conflict.”

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Talking about jobs and reservations, the former RBI governor said, “It's also a fight for jobs for reservations because one community is seen as getting more of that than the other. If we have joblessness of the kind we've seen, we lose that population, that demographic dividend we've been talking about. But it becomes a demographic curse, much more fighting about the pie rather than growing the pie. So, we absolutely need to work on that. And I would say let's try and elevate rather than bring the successful down.”

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