Weak State of Global Economy is the Reason for Subdued Exports: Rajan

Raising concerns over the subdued exports of India, RBI Governor Raghuram Rajan today said the weak state of global economy is a big factor there. As regards the stalled projects, the RBI chief said, “Economic growth will help put projects back on track that are on difficulty. We are doing everything we can as we work with banks to put it back on track.”

Talking to reporters after a meeting of RBI’s board, the central bank chief said, that subdued exports, primarily on account of global factors, remain an area of concern.

Rajan, meanwhile, said capital investments are picking up but a stronger growth would require more reforms and clearing bottlenecks for stalled projects.

“I would say (economy is) picking up,” he said.

We see some signs of capital investment picking up. There is a continuing need, which the government is trying to address, of putting some of the stalled projects back on track.”

Stating that the Indian economy is in the process of a steady recovery, Rajan said, “Would we want to (grow) faster? Yes, obviously. But we have to work in the areas of bottlenecks and areas where we need reforms to ensure that growth is strong and sustainable.”

On exports, Rajan said they “are an area of relative weakness. But they have been weak across the various Asian economies, to the exception of perhaps of China. The weak state of global economy is a big factor there.

“We need to continue to do the spade work to create sustainable growth and we discussed various plans that the RBI has over the coming years to do that.”