Raghuram Rajan - India fails to capitalise on democratic dividend

Former RBI governor Raghuram Rajan expressed concerns about India not fully benefiting from its democratic advantages. He stressed the importance of improving people's skills and human capital to unlock these benefits. Rajan spoke at a conference at George Washington University, highlighting India's growth challenges. Despite India Democratic dividend, the country's growth rate remains relatively low compared to China and Korea during similar periods. Rajan emphasised on India's missed opportunities from democratic dividend and the need for job creation and enhancing job quality to address this issue.

He criticised India's heavy investment in chip manufacturing, suggesting a focus on sectors like leather, which offer more job opportunities. Rajan noted that many Indian innovators prefer setting up businesses abroad due to easier market access. He urged India to create an environment that encourages innovation and entrepreneurship, allowing businesses to thrive domestically.

Rajan highlighted India's employment challenges, including high unemployment rates and low labour force participation, especially among women. He pointed out the increasing trend of educated individuals seeking government jobs, reflecting the mismatch between job supply and demand. Despite these structural challenges, Rajan acknowledged India's potential for growth and innovation, citing a new generation of entrepreneurs with global ambitions.

Rajan focused on the need for India to capitalise on its demographic dividend by investing in job creation, education, and fostering an environment for entrepreneurship. He called for a comprehensive approach to address India's employment issues and unlock its full economic growth.