India should chart its own economic path : Dr Raghuram Rajan

New Delhi: Stating that India should carve its own path on the strength of its skilled based growth instead of manufacture led exports like China and East Asian economies, former Reserve Bank governor Raghuram Rajan said India should aspire to become ‘front office of the world, creating paying jobs for the youth.

Why should an Indian product like Haldiram bhujia should be confined to Asian stores in the west and not shopping malls in the USA? He asked.

Speaking on ‘Constitutionalism and India’s Economic Future’ recently, Dr Rajan said Democracy and development were intrinsically linked and it was easy for India to gain the acceptance of the West unlike China and other East Asian economies. He has shared his video recorded speech among his followers.

India can’t build highways seizing lands or suppress labour using its oppressive system to be competitive in the global market. Democratic system and law and order is what India can offer as assurance to the world which China and other countries could not do.

India’s has already received successes in the export of Information Technology services and Generic pharmaceutical industries. With right kind of approach, India can rake in good amounts of foreign exchange by providing skill based exports from a distance.

Although Corona-19 pandemic has brought significant numbers of middle class below poverty line, it had also shown that many of the services can be provided from a distance.

Instead of becoming the back office of the world, India should aim to become front office offering management, tele-medicine, legal services to the world. Medical tourism, distance education, building retirement homes for the aged western pensioners in India could be another activity. These activities not only create paying jobs for the youth but would earn substantially high income for the country.

To assure the world, India would have to embrace it and not isolate itself. Democracy and its institutions were its strong points to earn the respect of the world. To assure this India will have to strengthen its institutions and individual rights, he said.

Decrying the tendency of the local industry to seek protectionism for the local production in the name of ‘Atma Nirbharata’, he said it would hurt the economy. There is no need to compete in manufacturing sector when you can use your strength of the system and ‘leapfrog’ to provide distance services with ‘Atma Vishwas’.

Commending good practices of improving government schools infrastructure in Delhi, Dr Rajan said such experiences should be shared with other states too. There should be a healthy competition between private and public sector schools.

“Creeping majoritarianism and authoritarianism is undermining India’s democracy’ and …will undermine our ‘long term well being’, he said adding that it would be in our interest to shun that path and pick one that is consistent with our values and institutions.

He said India, thanks to reforms initiated in early 90s and followed by subsequent governments including NDA-1 of Atal Bihari Vajpayee, had achieved a whopping seven percent sustained average growth in the economy for over two decades. This is a feat only a few economies could boast of, he remarked.