‘I’m a conservative investor’: Ex-RBI Governor Raghuram Rajan reveals what he holds in his portfolio

Eminent economist Raghuram Rajan, who managed India’s monetary policy for three years, recently revealed where he has made his investments and what stocks he has in his portfolio. “I am a very conservative investor,” Rajan said during an interview with India Today Group’s Lallantop. “Most of my investment is index funds and money market funds.” 

Also read: ‘We got lucky for 2 reasons’: Raghuram Rajan on why India’s GDP grew at 7.6% in Q2

When asked about whether he has stocks of US firms or Indian companies, Rajan, who served as RBI Governor from 2013 to 2016, said he has Indian stocks, but he started investing in the Indian firms only after he got out of the central bank. “When I became RBI Governor, I thought I should not invest in Indian stocks because of a conflict of interest,” the economist said.  

“When I got out of the RBI, I started investing in India. I have stocks of 1-2 specific companies, but most of my investments are in index funds,” said Rajan, who currently teaches finance at the University of Chicago’s Booth School of Business. 

Also read: ‘Not my proudest moment’: When Raghuram Rajan contested election, shut IIT-Delhi for a day

Rajan is currently in India to promote his latest book ‘Breaking The Mould’. He has co-authored the book with Rohit Lamba, an economist at Pennsylvania State University. During the interview, Rajan and Lamba touched upon several issues concerning the Indian economy.

The former RBI Governor, who is among the few economists who correctly predicted the 2008 financial crisis, also explained why India recorded better-than-expected GDP growth in the second quarter of FY 2023-24.

Rajan said India’s strong GDP growth was the result of better economic growth in the US and massive investment in the infrastructure sector by the central government. The economist had faced some backlash on social media as he had predicted less than 5 per cent growth for India in FY 2023-24

When asked about why he thinks the Centre’s production-linked incentive (PLI) scheme has not worked, Rajan said there was no value addition happening in the country as manufacturers were importing equipment and were just assembling them in India. “If you are just assembling…how much value addition are you doing? If that value addition is less then manufacturers will import all the parts, assemble them and export them and will take subsidy from the government.”

“We are asking how much value addition is happening in India. How many people are working (in manufacturing)? Are you really manufacturing it or assembling it with a screwdriver?” the economist asked. He, however, said that the government was rightly saying that this was the first stage and that they would make equipment also in the second stage.

“But we are saying that years have passed. We had a Nokia factory in India, and it was also assembling. We never made that jump to manufacture components. Maybe that happens now, but it is a slow process. But for how long will we be subsiding manufacturers to assemble?” Rajan asked.


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