'If it is business as usual, Viksit Bharat by 2047 will not happen'

Raghuram Rajan, former RBI governor, in an interview with Udit Misra, speaks on a wide variety of topics, ranging from inflation to GDP growth to the impact of possible global trade war under President Trump's second term. Excerpts:

- Raghuram Rajan, former RBI governor, in an interview with Udit Misra, speaks on a wide variety of topics, ranging from inflation to GDP growth to the impact of possible global trade war under President Trump's second term.

From people's perspective, overall affordability could become worse despite the inflation rate coming down. Some academics argue inflation targeting is not suited for India. Others, even within the govt, suggest ignoring food inflation. What is your take?

I think the reason that we targeted headline inflation (CPI) rather than core CPI (inflation without food and fuel prices), is because food is such a big part of the Indian consumption basket; to ignore it is to ignore one of the biggest components of inflation. So you may say, as RBI says, core inflation is coming down, but if your food inflation is high, people are hurting and they're saying, "What world are you living in? You don't see the fact that we are hurting".

What can the government do, or could have done, to contain inflation control?

That is the real challenge that we have, right? If you look at our GDP level relative to what it would be if we had grown at 6% steadily through the pandemic, we are about 6% below one year of growth. Below that one year means a lot of jobs (lost).