 "Rajan warns against return of licence-permit raj")
Reserve Bank of India Governor Raghuram Rajan warned against a return to protectionist industrial policies at BANCON 2013.
"Echoes of industrial planning seem to be heard once again in the corridors of power. I am worried because we seem to be reverting to a dialogue of protection and subsidies that we left behind long ago. Our industrial sector is no longer an infant that needs to be mollycoddled. While we should not enter into free trade agreements that give foreign manufacturers an undue advantage, that is no reason for us to now respond by giving domestic manufacturers protection," he said. According to Rajan, instead of targeting specific industries for governmental attention, which risks bringing back all the baggage of the 'licence-permit raj' the country has left behind, the focus should be on improving the conditions for growth for all.
"Echoes of industrial planning seem to be heard once again in the corridors of power. I am worried because we seem to be reverting to a dialogue of protection and subsidies that we left behind long ago. Our industrial sector is no longer an infant that needs to be mollycoddled. While we should not enter into free trade agreements that give foreign manufacturers an undue advantage, that is no reason for us to now respond by giving domestic manufacturers protection," he said. According to Rajan, instead of targeting specific industries for governmental attention, which risks bringing back all the baggage of the 'licence-permit raj' the country has left behind, the focus should be on improving the conditions for growth for all.