India is not benefiting from the demographic dividend: Raghuram Rajan

Raghuram Rajan, the former Reserve Bank of India governor, expressed concern about India’s expenditure of billions of dollars on chip manufacturing. He spoke at a conference at George Washington University about the challenges that India faces in reaping the benefits of its demographic dividend. Rajan highlighted the need for job creation and emphasized the importance of enhancing the capabilities of the workforce and changing the nature of available jobs. Rajan also criticized the heavy investment in chip manufacturing and pointed out that other job-intensive sectors, such as leather, were not faring well.

He stressed the need to rectify issues in these areas to address the growing job problem in the country. Furthermore, Rajan addressed the trend of Indian innovators setting up businesses in places like Singapore or Silicon Valley due to easier access to final markets. He expressed the desire to understand what drives entrepreneurs to establish their companies outside India and highlighted their global ambitions. Rajan went on to outline the unemployment challenges in India, including high unemployment numbers, disguised unemployment, and low labor force participation, particularly among women.

He also highlighted the increasing capital intensity of manufacturing, despite the massive pool of unemployed labor in the country. In conclusion, Rajan underscored the need for a comprehensive approach to address the job crisis in India, regardless of the sector.