Demonetisation, GST held back India's economic growth: Raghuram Rajan

Raghuram Rajan

Demonetisation and the Goods and Services Tax (GST) are the two major headwinds that held back India's economic growth last year, former RBI Governor Raghuram Rajan said, asserting that the current seven per cent growth rate is not enough to meet the country's needs.

Addressing an audience at the University of California in Berkley on Friday, Rajan said for four years - 2012 to 2016 - India was growing at a faster pace before it was hit by two major headwinds.

"The two successive shocks of demonetisation and the GST had a serious impact on growth in India. Growth has fallen off interestingly at a time when growth in the global economy has been peaking up," he said, delivering the second Bhattacharya Lectureship on the Future of India. Rajan, in his address, said a growth rate of seven per cent per year for 25 years is "very, very strong".

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