September 19, 2015

Stop jugaad, we need the long haul: Raghuram Rajan tells India Inc

Saying there are “no easy paths” to the top, Reserve Bank of India Governor Raghuram Rajan today urged corporate India to avoid what he called was the “jugaad” mindset, or “working around difficulties by hook or crook” and putting pressure for “quick impossible fixes.”

Instead, what was needed, he said, was a “discipline to stick to our strategy of building the necessary institutions and creating a new path of sustainable growth where jugaad is no longer needed.”

For this, Rajan said, “we need the understanding and cooperation of business, not impatience and pressure.” Delivering the C K Prahlad Memorial Lecture here today, Rajan said that jugaad ends up encouraging an “attitude of shortcuts and evasions, none of which help final product quality or sustainable economic growth.”

Rajan Rajan was speaking after the markets rose on the US Fed Reserve’s decision not to raise interest rates and the rupee hit a one-month high at 65.17 to the dollar. His remarks come 10 days after the Prime Minister met India Inc.

Do countries have core competencies? Raising this provocative question at the end of his lecture, Rajan used it to underline the long haul rather than the short cut. “If we say we want to focus on national core competencies, every industry will be out to show why it thoroughly fits the bill — in the same way as every industry today wants to tell us why they especially deserve special tax benefits or interest subventions.


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