In an address at a conference titled “Making India an Advanced economy by 2047:What will it take” at the George Washington University, Economist and former RBI Governor, Raghuram Rajan pointed India’s concerns over it’s failure to fully harness its demographic dividend.
He said, “It is an imperative need for the nation to prioritise human capital development and skill enhancement”.
Rajan highlighted the significance of job creation and the need to address the issue of unemployment. He remarked, “That’s why I stress the importance of achieving 6 per cent growth. If we scrutinize the GDP numbers closely, we will find that this growth is amidst our demographic dividend”
Comparing India’s situation to that of China and Korea during their demographic dividend phases, Rajan noted a significant disparity, “We are falling short of where China and Korea were when they reaped their dividends. This discrepancy is concerning”
“We cannot afford to be complacent and celebrate our current situation as great, the reality is we are not providing enough job opportunities”, he added.
Rajan also advocated for apprenticeship initiatives aimed at improving youth employment prospects. He said, “It’s crucial to enhance people’s capabilities and transform the nature of available jobs”
“And that leads us to the question, how do we create those jobs? The answer to my mind is partly enhancing the capabilities of the people we have, partly changing the nature of the jobs that are available and we need to work on both fronts. This idea of apprenticeship which the Congress has in its manifesto is worth working on. I think there’s a lot that needs to be done to make it effective, but we need many more students to at least be capable of doing a good job”, Rajan said.
Rajan raised critical questions regarding India’s investment priorities particularly scrutinizing allocations towards sectors like chip manufacturing. “Consider the substantial sums directed towards subsidizing chip manufacturing”, he said while questioning the rationale behind such investments.
He also highlighted the decline in labor- intensive sectors like leather, stressing the importance of addressing underlying issues contributing to the job crisis.
“We observe a downward trend in these areas, aggravating our job woes”, Rajan said. “While I am not advocating for subsidies in these sectors, it is imperative to identify and rectify the root cause of their decline”
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