Did Raghuram Rajan say India is becoming like Sri Lanka?

Many posts in social media claim that the Former RBI Governor had said so.

Claim

Claim

People should save money. Situation is becoming like Sri Lanka. – Raghuram Rajan

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Between the devil and the deep sea The economist and former Governor of RBI Raghuram Rajan has cautioned Indians to save and keep money, as India is going to be bankrupt like Sri Lanka. But there is no way to do it :if you keep your money in a bank, you lose it since the bank would become bankrupt, and if you keep it at home, Modi would seize it ,as the far-sighted Modi has made it illegal to keep cash at home! We are living between the Devil and the deep sea.

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Explanation

Sri Lanka has been in dire economic situation following several questionable policy decisions over the years. There has been acute shortage of food, petroleum products and other essential items. The island nation’s foreign exchange reserves have been almost wiped out and the country is struggling to finance its imports. The Covid pandemic and the resulting drop in tourism had also made the situation worse for Sri Lanka. Now, several social media posts are claiming that the Former Governor of the Reserve Bank of India, Raghuram Rajan, had said that India would face a similar situation like Sri Lanka and he had advised people to save money. Some of the posts can be seen here, here, here and here.

What’s the truth?

A keyword search resulted in several articles from end of July and the beginning of August 2022. In an interview, Raghuram Rajan was asked about the direction in which the country is headed and if it is going down the way of Sri Lanka and Pakistan. See here, here, here and here.

Raghuram Rajan had replied that India would not go down the same path as Sri Lanka or Pakistan. He also pointed out that India has sufficient foreign exchange reserves. the Reserve Bank of India had done a good job of maintaining and increasing the foreign exchange reserves. He mentioned that the India’s (foreign) debt is not as high (as the other countries).

We also found a video of his interview that was published in ANI on 30th July 2022.

 

Conclusion

Raghuram Rajan did not say that India would become like Sri Lanka. On the contrary, he said that India has sufficient foreign exchange reserves to avoid situations like in Pakistan or Sri Lanka. The claims made in social media are false.

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Ramasamy Jayaprakash

Ramasamy works as a Senior Sub-Editor at YouTurn and writes articles in Tamil and English. He also makes videos for YouTurn's Tamil & English YouTube channels.
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