I fully agree with Deba Pratim Ghatak’s letter, “Riding on glamour” (September 20). I will examine some of the statements made by former Reserve Bank of India governor Raghuram Rajan and what he writes in his book, I Do What I Do.
Rajan said there were better ways than demonetisation to achieve the objective of removing black money. But he does not state any, except tackling over-invoicing by companies in a general way without mentioning import or export.
Consider invoicing of import: Nearly 50 per cent of import is of oil and by government undertakings. For the rest, there is little scope, as value comparisons are made with comparable prices by the Directorate General of Valuation, set up for this purpose. A few cases by some shell companies can be called fraud, but the number is not substantial. The money is saved abroad; it is not black money in India.
Over-invoicing of export is not practicable, as Indian goods are not competitive in foreign markets. Rajan has not discussed the main source — direct tax and real estate. His statement is not quite economics, merely surmise and amateurish.
In the book, Rajan’s attempt to justify his running down of the concept of Make in India in favour of “Make for India” is less than convincing. He made a mistake in elementary economics. His propensity to lecture more than concentrating on his work has led to this problem.
Sukumar Mukhopadhyay New Delhi
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