Rajan highlighted India’s unemployment issue, with the Centre for Monitoring Indian Economy (CMIE) reporting an unemployment rate of 8.1% for April 2024. He made these comments during an interview with CNN’s Fareed Zakaria on the show ‘On GPS: India’s Employment Crisis.’
Raghuram Rajan– former Reserve Bank of India (RBI) governor reflected on India’s unemployment figures and posed a question during a discussion with with CNN’s Fareed Zakaria: “Will Indians become rich before India grows old?” He said that India is currently getting the benefits of the population dividend, noting, “Even if India is the fastest growing economy in the G20, it is also the poorest country.
Young people are coming into the labor force in massive quantities. If we could employ them, India would grow much faster. “He said that India is currently getting the benefits of the population dividend. “Young people are coming into the labor force in massive quantities.
If we could employ them, India would grow much faster,” said Rajan, giving examples of China and Korea in their intense growth periods. Zakaria pointed out that China, Korea, and Taiwan were growing at 10 percent when they were at the stage where India compared to India’s 6.5 percent growth.
“Relative to the rich countries, we look perfect. Also, we have a large population, so we are overtaking other countries in terms of overall GDP. We have just overtaken the UK; India is the fifth-largest economy. Soon, India will overtake stagnant Japan and Germany to become the third-largest economy. The real issue is: Can Indians become rich before India grows old?” said Rajan.
He argued that the population dividend that India is reaping now won’t remain the same and that fewer people will join the workforce. He pointed out that the Indian population would age. When asked how much credit the Modi government deserves, the economist acknowledged that they must be credited for many things, like the infrastructure developments.
“If you want roads to be built, railways to be built, that centralized coordination happens well with a more authoritarian government, which is what the Modi government is,” said Rajan, pointing out that a more accessible environment is necessary for innovation, debate, and arguments.
“You can’t suppress protests in universities…or independent media,” said Rajan, adding that if one is going on a new path, they should know where they are going wrong. The immediate issue, said Rajan, for India, was to create enough jobs and upskill people to make them employable and enhance India’s women’s labor force participation. He also said India has no university in the top 100. “But if you bring the diaspora together, we can populate many universities in India with professors of the highest caliber worldwide.
Can we get a few of them back to give competition to the Oxfords and Harvards,” asked Rajan. He said that India always has a way of surprising and that “again and again, we would be surprised by the maturity of the Indian electorate.”
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