India distracted by ideological considerations, says Nouriel Roubini

While speaking on the monetary policy-related aspects, Roubini also flagged up the issue of RBI autonomy.

Indian policymakers have been “distracted” by ideological considerations, when the economic slowdown deserves the most attention, American economist Nouriel Roubini said on Thursday.

Foreign investors get “worried” by scenes of protests on the streets, the professor at New York University’s Stern School of Business said, warning that economic slump can make a regime unpopular.

The comments from Roubini come at a time when official data showed that GDP growth may to slip to 11-year-low of 5 per cent this fiscal, and amid growing protests across the country against the Citizenship Amendment Act, which critics allege as being discriminatory against the Muslims. “The macroeconomic policies are not where they should be, structural policies are not where they should be,” Roubini said, while speaking at an event organised by CFA Society India.

In a conversation with global brokerage firm Morgan Stanley’s Riddham Desai, Roubini rued that Indian policymakers are focusing on other aspects despite global headwinds like the impacts that can be caused due to a rise in oil prices amidst the US-Iran conflict. x“The attention of the policymakers should have been concentrated on the economy and is instead distracted by political things, ethnic things and other things to do with ideology,” Roubini said.

Uncertainties are not good for the economy, he said and referred to President Bill Clinton’s famous phrase ‘It is the economy, stupid!’ to warn that the policies adopted may not pay political dividends as well. “You may be popular initially because of politics and ideology but if the economy slows down, you will be losing your popularity,” Roubini said.

He said the Indian economy was in a “slowdown” and the declining growth will “probably stabilise” in 2020.He bracketed India among the emerging markets where a growth pick-up is up to two quarters away.

While speaking on the monetary policy-related aspects, Roubini also flagged up the issue of RBI autonomy. "There has been some concern on how much the RBI is independent, than what it used to be," he said... Read More