Former central bank governor Raghuram Rajan feels that India's attempts to emulate China's export-led path are futile and instead India should build on its strengths such as „service exports and democracy“. There is.
In an article for the Financial Times, Rajan cited two problems that India has in its pursuit of growth that Beijing does not have. First, we benefited from first-mover advantage. Second, the world will not want to encourage „another China,“ conscious of the scrutiny China has escaped while on a growth trajectory, Rajan said.
Mr. Rajan emphasized on strengthening democracy, which will help make India's economy safe and reliable for foreign investors.
He said it would be appropriate for India to consider improving the quality of its schools and universities instead of having „300,000 engineers designing chips for companies around the world.“
Rajan recently stated that while he is not opposed to manufacturing or expanding production in India, he is concerned about the use of subsidies and tariffs in opaque ways.
Rajan questions the Centre's large subsidies to big companies under the PLI scheme and huge incentives for chip manufacturing in India.
„We are not against manufacturing or domestic defense production, nor are we against more production in India. We do not advocate providing services at the expense of manufacturing. I would like to see more Indians working in non-agricultural jobs. Manufacturing is certainly one of the key possibilities.'' ” he said in a lengthy LinkedIn post.