Former RBI governor Raghuram Rajan remarked on Tuesday that India is failing to capitalize on its demographic dividends, stressing the importance of enhancing human capital and skill sets. He spoke during a conference held at George Washington University titled "Charting India's Path to an Advanced Economy by 2047."
He highlighted that India's current growth rate of around 6 percent, despite being amidst a demographic dividend, falls short of the levels achieved by China and Korea during their demographic dividend periods.
"That's why I said 6 per cent growth. If you think that's about what we are right now, take away the fluff in the GDP numbers. That 6 per cent is in the midst of a demographic dividend. It is much below where China and Korea were when they reaped their demographic dividend. And that's why I'm saying we are being overly complicit when we say this is great. This is not because we are losing the demographic dividend because we are not giving those guys jobs," said Rajan.
Rajan emphasized the urgent need for job creation and suggested focusing on enhancing people's capabilities and transforming available job opportunities. He questioned the allocation of substantial funds towards chip manufacturing subsidies while neglecting job-intensive sectors like leather, contributing to India's growing unemployment issue.
"We are going down in those areas. No wonder we have more of a job problem. The job problem was not created in the last 10 years. It's been growing over the last few decades. But if you neglect the areas which are more intensive, I'm not saying we need to now offer subsidised subsidies to leather examples, but figure out what's going wrong there and try and rectify that," he said.
Rajan also addressed the trend of Indian innovators establishing businesses abroad due to easier access to global markets, urging a reflection on the factors pushing them away from India. Despite challenges, he expressed optimism about the entrepreneurial spirit of Indian youth but underscored the need for systemic changes to foster domestic innovation and job growth across various sectors.
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