Financial regulators designed in socialist era, must change: Amitabh Kant

Financial regulators were designed in the "socialist era" and there is a need for a change in the mindset of many regulators to aid economic growth, India's G-20 sherpa Amitabh Kant said on Wednesday.

Kant, a career bureaucrat who was till recently heading the government's think-tank Niti Aayog, also hit out against certain politicians for "ruining" the country by offering freebies like free power without naming anyone.

Speaking at the annual SBI conclave, Kant said financial sector regulators like the Reserve Bank of India, Securities and Exchange Board of India or even the Competitive Commission of India need to act as development and change agents.

"...regulators were also designed at a particular period when you were going through a socialist era, and therefore, there is a huge need for a change of mindset amongst many of the regulators I strongly believe," he said.

The remarks come at a time when the RBI has hiked interest rate by 1.90 per cent to tame inflation, which is its core objective, which is bound to have an impact on growth.

Citing the case of the Competitive Commission of India, he said the fair-play watchdog's preamble mentions about the need for growth of the country and added that other regulators also have similar objectives.

"I think there's also a need for regulators, to themselves believe that they need to play a very major and a critical role in the development story of India and that India cannot grow at higher rates without the regulator's driving many of these things," he said.

Kant said India cannot even aspire to grow at 7 per cent if it does not seize upcoming opportunities like electric mobility and renewable energy.

In contrast with those pitching for focus on the services sector to drive growth, Kant said India will have to push on the manufacturing engine to drive growth.

He also said that the Ministry of Finance is working on "taxonomy" or a scheme of classification, which will see India also taking strides on the green front using data wherein companies causing pollution will not be able to avail loans for low-interest rates.

The sherpa also defended the country's stance on the world stage and added that it ought to be equidistant in the Russia-Ukraine war. He said the country's stance was appreciated at the recently concluded G-20 summit in Bali, where it was able to lead the world leaders towards an agreement.

The G-7 block was insisting on a strongly worded statement against the Russians, and trying to impress the impact on the entire world by making food and fertilisers dearer, but it was India which was able to get everybody, including Russia and China, to agree on the text of the statement, he added.

As part of its G-20 presidency, the country plans 200 events across 56 cities, Kant said, adding that he wants the entire country to benefit from such an exercise.

The world looks up to India because it is growing with the right policy mix where debate, dissent and discussion are possible, and also termed the country as the "mother of all democracies".