“Jobless growth”, “Decisions Without Consultations” in India: Raghuram Rajan

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Former Reserve Bank of India Governor Raghuram Rajan on Tuesday said that the country’s economic growth of 7% for the current fiscal year is “insufficient for the kind of jobs” it needs, NDTV reported.

“A lot of this growth is jobless growth,” he said. “Jobs are essentially Task One for the economy. We don’t need everybody to be a software programmer or consultant but we need decent jobs.”

On July 18, Minister of State for Finance Pankaj Chaudhury said in Lok Sabha that India’s real Gross Domestic Product, or GDP, is expected to remain above 7% in 2022-’23 despite geopolitical tensions like the Russia-Ukraine war.

“This is in contrast to many advanced and emerging market economies where considerable downward revision in GDP growth rate has been made by international agencies like IMF post-Russia-Ukraine crisis,” Chaudhury added.

On Tuesday, Rajan told NDTV that he agrees that India’s growth figure is better compared to other nations. However, he pointed out that the country still needs more growth due to its vast population.

Rajan also said there are no shortcuts to creating jobs for everyone in India. “We have to increase the skill base and education of our people,” he continued. “If we can create the skill base, the jobs will come.”

The former Reserve Bank of India governor said that the Union government needs to have a dialogue before formulating decisions like demonetisation and farm laws, NDTV reported.

On November 8, 2016, Prime Minister Narendra Modi announced that Rs 500 and Rs 1,000 notes would cease to be legal tender in India from midnight. Modi had said that the decision had been taken to “fight corruption, black money and terrorism”.

Modi, on November 29, withdrew the three contentious farm laws that had caused year-long protests between 2020 and 2021. The protesting farmers had expressed fears that the central government’s new laws would make them vulnerable to corporate exploitation and would dismantle the minimum support price regime.

“In the last few years, you have seen a number of decisions without wide consultation – demonetisation for example,” Rajan said. “Now you couldn’t have had wide consultations. There are others – farm bills for example. In a democracy, it works when you have a dialogue. It need not be an endless dialogue. And often people know what the ground realities are better than coterie sitting in the PM’s office.”

Rajan said that the current BJP-led government has a view that only those who constantly clap are right as it does nothing wrong, NDTV reported.

“Every government does wrong,” he said. “I have criticised the UPA [United Progressive Alliance] government when I was not part of the establishment and I have worked with the previous NDA [National Democratic Alliance] government.”

Rajan added that he has no reason to be partial and some criticism is warranted.

On July 31, the BJP had referred to Rajan as a critic of the Union government, who was acknowledging the strength of Prime Minister Narendra Modi’s policies, the Hindustan Times reported.

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