Overview
- Rajan said official GDP figures above 7% do not match business behavior because corporate capital spending remains subdued, a gap he called 'something is off.'
- He highlighted a decade-long shortfall in corporate investment as a central puzzle that undermines the quality and sustainability of reported growth.
- Rajan pointed to a recent drop in foreign direct investment and portfolio inflows as signs that domestic and overseas investors are reluctant to commit fresh capital.
- He warned that the government’s partial absorption of higher fuel costs has fiscal limits and argued for gradual price pass-through to target subsidies to the poorest.
- Rajan urged a clearer, actionable economic vision with structural reforms to restore investor confidence, boost factory investment and create jobs.