Former Reserve Bank of India Governor Raghuram Rajan on Sunday said populist nationalism has the potential to damage economic growth, and short-term “political solutions” to concerns about job reservations could hamper the fabric of the country, PTI reported.

“Populist nationalism...[can] set back the economy because it is divisive,” Rajan said in a recorded message played at the Times Lit Fest in New Delhi on Sunday. “It feeds off the sensation of the majority of the community feeling it is being discriminated against...It exists all over the world and also in India, while people exploit this sense of grievance.”

The economist also warned that policies arising out of populist nationalism are often hurdles in the way of growth. “Nationalism is not patriotic because it is divisive and can even be quite dangerous,” Rajan said. “However, it is wrong to dismiss people who are voicing these things...dismissing them as rustic.”

He also suggested involving people from a wide spectrum to quell concerns of people feeling discriminated against, highlighting that some strong communities in India had started agitating for reservation because they could not find jobs. He also highlighted the “cosy relationship” between political establishments and companies, saying “illiberal democracy” was worrying and needs to be tackled.

Rajan’s three-year term as RBI governor ended on September 4, 2016. He is currently a professor at the University of Chicago Booth School of Business.