Zoho's Sridhar Vembu disagrees with Raghuram Rajan, says India 'needs to be strong in manufacturing like East Asia'

ZOHO founder Sridhar Vembu (illustration: Moneycontrol)

Zoho Corporation founder Sridhar Vembu on February 15 categorically rebuffed Reserve Bank of India former governor Raghuram Rajan's opinion that India should not follow the Chinese path of manufacturing and export-led growth.

Vembu said that in order to develop the economy, India needs to be strong in manufacturing like East Asia.

While commenting on the Union Budget, Rajan, in an article in the Times of India opined that India should strengthen its democratic credentials and chart its own path by focusing on value-added services.

"The vision that can be gleaned from this Budget is of India becoming a manufacturing export powerhouse that will replicate China's success. This is no small vision. But is the China path even feasible for India?" Rajan wrote in the article.

Vembu took to Twitter to express his disagreement.  "Raghuram Rajan thinks India should focus on services and does not need industrial policy focused on manufacturing. His prescription echoes America's path to deindustrialization and inequality," he said, adding that "India needs to be strong in manufacturing like East Asia."

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Raghuram Rajan thinks India should focus on services and does not need industrial policy focused on manufacturing.

His prescription echoes America's path to deindustrialization and inequality.

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India needs to be strong in manufacturing like East Asia.

— Sridhar Vembu (@svembu) February 15, 2022

Rajan had also commented that the government's lack of an economic vision is now palpable.