Indian Former Reserve Bank of India (RBI) Governor Raghuram Rajan said on Tuesday that India is not taking advantage of the demographic dividend. Demographic dividend means increase in productivity due to more workforce and less number of dependents and hence faster economic growth. Rajan stressed that there is a need to focus on improving human capital and enhancing their skills. “I think we are in the middle of it (demographic dividend), but the problem is that we are Not taking advantage of it.”
China and Korea had taken great advantage
He said, “That’s why I said… six percent growth.” If you think this is where we are right now, take the mess out of the GDP figures. That six percent is only in the demographic dividend. This is much lower than where China and Korea were when they achieved their demographic dividend. Rajan has been critical of India spending billions of dollars on chip manufacturing. “Think about these chip factories,” he said. So many billions of dollars of subsidy will be given on chip manufacturing,” he said, while many employment-intensive sectors like leather are not performing well. “We are going down in those sectors,” Rajan said. No wonder we have a job shortage problem. It did not arise in the last 10 years, but has been growing for the last few decades. However, if you ignore the sectors that can be increased.
Why are Indian innovators going to Singapore or Silicon Valley?
I am not saying that we need to subsidize the leather sector now, but find out what is going wrong there and try to improve it.” Responding to a question, Rajan said that many Indians Innovators are now moving to Singapore or Silicon Valley because they find it easier to access end markets there. Meanwhile, Arun Kumar, managing partner of Celesta Capital, who was present at the event, said, “India is getting the benefits of globalization. Its economic prosperity will be driven by its global interdependence to increase trade and investment in and from India, which will help in job creation, GDP growth and prosperity. Today the global supply chain situation works in India’s favor for increased participation in manufacturing.” He said, ”Trade facilitation, ease of doing business, modern infrastructure and related infrastructure are needed to facilitate greater participation in global value chains. “There is a need for continued focus on building logistics.”
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