Summary:
New Delhi, Jan 23 (PTI) The Indian economy has "some bright spots and a number of very dark stains" and the government should target its spending "carefully" so that there are no huge deficits, noted economist and former RBI Governor Raghuram Rajan said on Sunday.
Known for his frank views, Rajan also said the government needs to do more to prevent a K-shaped recovery of the economy hit by the coronavirus pandemic.
Generally, a K-shaped recovery will reflect a situation where technology and large capital firms recover at a far faster rate than small businesses and industries that have been significantly impacted by the pandemic.
"My greater worry about the economy is the scarring to the middle class, the small and medium sector, and our children"s minds, all of which will come into play after an initial rebound due to pent up demand.
One symptom of all this is weak consumption growth, especially for mass consumption goods," Rajan told PTI in an e-mail interview.
Rajan, currently a Professor at the University of Chicago Booth School of Business, noted that as always, the economy has some bright spots and a number of very dark stains.