India’s growth figures may be better than other nations, but former RBI governor Raghuram Rajan says that the same is a “jobless growth” and the country needs more growth to match its massive population.
In an interview with a news website, the former chief economist of the International Monetary Fund said the country needs to ramp up its skill base and educate more people if it wants to create more jobs.
“Jobs are essentially Task One for the economy. We don’t need everybody to be a software programmer or consultant, but we need decent jobs,” he was quoted as saying.
Rajan reiterated his stand that the liberal nature of the Indian democracy was fading fast, and hinted that the same may have severe repercussions on the economy. He cited the example of financially-battered Sri Lanka, whose problems were a manifestation of the troubled past of the Tamil minorities, who formed a part of its successful middle-income economy.
“Sri Lanka certainly had a large minority – the Tamils. And when they had a problem of jobless growth, politicians found it particularly easy to deflect some of the attention to the problem of minorities and made a bogeyman out of the minorities…essentially creating the strife that resulted in civil war,” he said.
He said India is on a similar path, with a few politicians fuelling the narrative against minorities.
When one might wonder how communal equations may affect an economy, Rajan simplifies the concept – “People worry. First, they think of the consequences down the line…The other thing they think about is ‘Do I really want to do business with a country which mistreats its minorities?’” he said echoing the sentiments of nations which may want to stay away from doing business in the future.
In this context, he cited the example of China, whose mistreatment of the Uyghur Muslims earned it the disdain of the US and Europe, sanctions on goods produced in the country and motions by shareholders to stop doing business.
At an earlier event in Raipur last month, Rajan had stressed that strengthening liberal democracy and its institutions were key to achieve economic growth.
“…what is happening to liberal democracy in this country and is it really that necessary for Indian development?…We absolutely must strengthen it. There is a feeling among some quarters in India today that democracy holds back India…India needs strong, even authoritarian, leadership with few checks and balances on it to grow and we seem to be drifting in this direction,” Rajan had said.
The under-performance of the country in terms of economic growth “seems to indicate the path we are going on needs rethinking,” he had said.
“Our future lies in strengthening our liberal democracy and its institutions, not weakening them, and this is in fact essential for our growth,” he had said.
Claiming that India’s slow growth was not just due to the COVID-19 pandemic, Rajan said the country’s underperformance predated it. “Indeed for about a decade, probably since the onset of the global financial crisis, we haven’t been doing as well as we could. The key measure of this underperformance is our inability to create the good jobs that our youth need,” he said.
(With inputs from agencies)