Former Reserve Bank of India Governor Raghuram Rajan on Sunday said he was worried that India’s economic growth has slowed further in the third quarter, PTI reported.

India recorded year-on-year growth of 4.4% in October-December quarter, down from 6.3% in the second quarter from July to September, data released by the government on Tuesday showed. The government, however, retained its growth forecast of 7% for 2022-’23 while revising the growth rate for 2021-’22 to 9.1% against the earlier estimate of 8.7%.

“Of course, the optimists will point to the upward revisions in past GDP [gross domestic product] numbers, but I am worried about the sequential slowdown,” Rajan said in an interview with PTI. “With the private sector unwilling to invest, the RBI still hiking rates, and global growth likely to slow later in the year, I am not sure where we find additional growth momentum.”

The renowned economist said that his concerns are not misplaced since the central bank has projected 4.2% growth for the fourth quarter of 2022-’23.

“At this point, the average annual growth of the October-December quarter relative to the similar pre-pandemic quarter three years ago is 3.7%,” he added. “This is dangerously close to our old Hindu rate of growth! We must do better.”

Indian economist Raj Krishna had coined the term “Hindu rate of growth” in 1978 to characterise the slow growth between the 1950s and the 1980s.

Adani Group crisis

On Sunday, Rajan, a finance professor at University of Chicago Booth, also questioned why the Securities and Exchange Board of India has not yet investigated four Mauritius-based funds that have reportedly parked 90% of their $6.9 billion in Adani Group stocks.

The funds – Elara India Opportunities Fund, Cresta Fund, Albula Investment Fund and APMS Investment Fund – have attracted attention for last couple of years after allegations that they may be shell companies.

In January, American firm Hindenburg Research in a report had alleged that overseas entities and shell companies were tied to Adani Group and surreptitiously owned stock in its listed firms. The listed firms of the Adani Group have together lost about $145 billion in market value since the report was published.

On Sunday, Rajan wondered if the market regulator needs help from investigating agencies to examine the allegations against the Adani Group.

“It does not serve the country well when certain families are seen as having privileged access to policymakers,” the former central bank governor added. “Let businesses flourish based on their acumen, not on their connections.”

Opposition leaders have repeatedly accused Prime Minister Narendra Modi of favouring Gautam Adani, the chairperson of the ports-to-energy conglomerate. However, Union Home Minister Amit Shah has rejected the allegations, saying that the BJP has “nothing to hide or be afraid of”.