India not benefiting from democracy dividend: Raghuram Rajan

He criticized India for spending billions of dollars on chip manufacturing.

Washington:

Former Reserve Bank of India Governor Raghuram Rajan on Tuesday said India has not reaped the dividends of democracy and stressed the need to focus on improving human capital and enhancing skills.

“I think we are in the middle of it (a democratic dividend), but the problem is we are not reaping the benefits,” Rajan told a conference on “Making India an Advanced Economy by 2047: What It Takes” at George Washington University. it’s here.

“That’s why I say 6% growth. If you think that’s where we are now, just take the fluff out of the GDP numbers. That 6% is in the demographic dividend. It’s well below China and Growth rate in the U.S. “Korea is when they reap the demographic dividend, and that’s why we’re so complicit when we say it’s great, it’s not because we’re not giving these people jobs. ” said the Reserve Bank of India Governor.

“That begs the question, how do we create these jobs? I think the answer is partly to improve the capabilities of our existing workforce and partly to change the nature of the existing jobs, and we need to work on both fronts.

“The idea of ​​apprenticeships proposed in the Congress manifesto is worth working towards. I think there is a lot more to be done to make it effective, but we need more students who are at least capable of doing the job well,” Rajan said, adding that there also needs to be a focus on creating job opportunity.

Rajan has been critical of India spending billions of dollars on chip manufacturing. “Think about these chip factories. There are billions of dollars spent subsidizing chip manufacturing,” he said, adding that some employment-intensive sectors such as leather were not doing well.

“We are going downhill in those areas. No wonder we have more employment problems. The employment problem was not created in the last decade. It has been growing over the past several decades. But if you ignore those areas that are more intensive , I’m not saying we need to subsidize leather goods now, but find out what the problem is and try to correct it,” he said.

Replying to a question, Rajan said many Indian innovators are now heading to Singapore or Silicon Valley to set up companies as they find it easier to access end markets there. “We need to ask, what compels them to leave India to start a business, rather than stay in India? But what is really heart-warming is talking to some of these entrepreneurs and seeing their desire to change the world and how more and more entrepreneurs are staying in India Not happy,” he said.

“They actually want to expand more globally. I think young India has a Virat Kohli mentality. I am second to none in the world,” Rajan said.

Rajan said in his speech earlier that India has problems no matter whether it chooses service industry, manufacturing or agricultural construction.

“This is well known, I don’t need to elaborate. The unemployment rate is high, the disguised unemployment rate is even higher, the labor force participation rate is low, the female labor force participation rate is indeed alarmingly low… The ratio of agriculture and employment, of course, this It all shows up in the unemployment of highly educated people and the huge number of people applying for government jobs and applying for jobs as railway workers.”

“Even as this is happening. Even as we have large job losses, the capital intensity of our manufacturing sector is steadily increasing,” Rajan said.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)