Former Reserve Bank of India (RBI) deputy governor and former executive director at the IMF, Rakesh Mohan on Wednesday said that Indian economy is in structural slowdown since 2012.
Mohan said, "Cutting of rates won't have as much of a response. One does not know what in some sense ought to be the resting point for the rates."
"Now, this is a global problem that since the North Atlantic Financial Crisis in 2008-2009, the global central banks whether it is the US Fed, the European Central Bank, Bank of Japan, Bank of England etc. have all cut rates down near zero. Of course, there has been some increase in the US Fed last year but they have had to again start cutting," he added.
"The general view around the world is that we seem to have come to the end of monetary policy activity, utility, effectiveness etc, so there is much more very interesting discussion going on now without yet a conclusion that we need to be thinking much more of macro-management with more coordination of fiscal and monetary but this discussion is still in progress," Mohan said.