“You (prime minister) must focus on the economy to the exclusion of all other concerns. That and that alone, will secure your place in history and will secure your legacy,” said Subbarao, speaking at the Times Network India Economic Conclave 2021.
Subbarao is known for steering the economy out of the depths of the Global Financial Crisis when he took over the reins from Y Venugopal Reddy as RBI governor on the eve of the collapse of investment banking giant Lehman Brothers, which acted as the catalyst for the worst financial crisis in post-World War II history.
However, the civil servant-turned-RBI governor also dealt with one of the worst inflationary episodes in modern Indian economic history and the chaos caused by what is widely referred to as taper tantrum in the financial market in 2013.
Subbarao said that the prime minister’s job and mandate is to accelerate the economic growth rate, and ensure that the benefits of growth go to the bottom half of the population.
India’s economic growth has slowed considerably under the current administration from the highs of 7-7.5 per cent at the beginning of PM Modi’s first term to around 4 per cent prior to the knockout punch delivered by the COVID-19 pandemic in 2020.
The former RBI governor also said that it will be a long time before the economy can return back to the 9 per cent growth trajectory, and a key factor in reaching that growth path will be the revival of the export sector, which has a great multiplier effect.
Subbarao also shrugged off concerns that privatisation of government companies is equivalent to selling the family silver as he believes that the government can utilize the proceeds towards investment in infrastructure and education, which can push the economy to a sustainable growth path.
“It is time that the government must yield space in business (to the private sector),” Subbarao added.