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Fact Check

Did Raghuram Rajan Say Indian Economy Would Become As Bad As Sri Lanka

We found a year-old quote by Rajan, where he stated that India would not see the same economic situation as Sri Lanka.

By - Archis Chowdhury | 9 March 2023 12:17 PM GMT

An image of economist and former Reserve Bank of India Governor Raghuram Rajan is being shared with a text, purportedly as a quote from him, which says,"People (in India) should start saving money, the situation will become like that of Sri Lanka".

These posts claim that Rajan has stated that India will head towards bankruptcy like its southern neighbour.

BOOM found this claim to be false; we found a year-old quote by Rajan, where he said that India would not see the same economic situation as Sri Lanka, or even Pakistan, due to the country's sufficient foreign exchange reserve. We also found a recent quote by Rajan in an email interview to PTI, where he highlighted a 'worrisome' situation with the current economic growth rate of India. However, he made no reference to the situation heading towards that of Sri Lanka.

Additionally, while responding to our query over email, Rajan stated that the viral quote being attributed to him was fake.

Sri Lanka is currently going through a historic economic crisis, that has been persistent over the past few years, leading to the country defaulting on its foreign debt last year. The dire situation eventually sparked widespread protests last year, leading to the ousting of the Rajapaksa family-led administration.

The image of Rajan was shared online with the following Hindi Caption," लोगों को बचाकर चाहिए हालत श्री लंका वाले बन रहे है।"


View the image here.

We found another posting the same quote in English, with the caption, "The economist and former Governor of RBI Raghuram Rajan has cautioned Indians to save and keep money, as India is going to be bankrupt like Sri Lanka."


View the post here.

Fact-Check

BOOM searched for quotes by Rajan on Indian economy, and found a recent email interview to news agency PTI, where he expressed his concerns regarding the slowing down of the economic growth in Q3 to 4.4 per cent, falling from 6.3 per cent in Q2.

He suggested that this was 'dangerously close to the Hindu rate of growth', a term popularised in 70s and 80s to highlight lower annual growth rate (average of 4 per cent) of the Indian economy under, before the economic reforms of 1991.

Reading through Rajan's responses, we found him highlighting issues such as inflation, job creation and stronger oversight over private companies, among others. However, we could not find a single mention of India heading towards bankruptcy or sovereign default, neither did we find any reference to Sri Lanka.

Looking through our keyword search, we also found an interview of Rajan by ANI on July 30, 2022, where he was asked whether India could face an economic crisis similar to that of Sri Lanka or Pakistan.

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Rajan responded by stating that India would not be facing an economic situation similar to that of Sri Lanka or Pakistan, and also highlighted that the country has a lower foreign debt compared to its neighbours.

He also said that India has sufficient foreign exchange reserves, and also praised the RBI for increasing them. We could not find any other recent instance of Rajan speaking on the Indian economy with reference to the Sri Lankan crisis.

In September last year, a fictitious quote of Rajan, from right-leaning satirical website The Fauxy, went viral as a real quote. We had reached out to Rajan, who had debunked the posts sharing the satirical content as real.