Raghuram Rajan on ‘real issue’ that Indian economy faces: ‘No country can…’

Contrasting India with China, Raghuram Rajan said, “Relative to the rich countries, we look really good."

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?”

Former governor of Reserve Bank Of India (RBI) Raghuram Rajan is seen.

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 labour force in massive quantities. If we could employ them, India would grow much faster.

Contrasting India with China, Raghuram Rajan said, “Relative to the rich countries, we look really good. Also we have a large population, so we are overtaking 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?”

“By 2047-2050 we are going to start growing old. Are we going to be rich by then? Not at 6-6.5 per cent growth,” he added.

Crediting PM Mogi for infrastructure development, he said, “If you want roads to be built, railways to be built, that centralised coordination happens well with a more authoritarian government, which is what the Modi government is."

Raghuram Rajan also said, "No country has ever succeeded by treating a large part of its population as second-class citizens. They should get the sense of progress, that things are getting better. You cannot reverse the environment of equality that India has enjoyed since independence.”