Is India flourishing?

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The security breach at the parliament on December 13 brought the spotlight on the unemployment crisis in India. In his book “Breaking the Mould”, Raghuram Rajan, the former governor of the Reserve Bank of India, talks about the fundamental economic decisions that affect every Indian. At an event hosted by Bangalore International Centre, economists Raghuram Rajan and Rohit Lamba, tried to decipher India’s growth story and the race to be the fifth largest economy.

In his opening remarks, Mr Rajan posed the question,

"Is India flourishing?"

With the developments and advancements of the twenty-first century, he claimed that India will grow old before it gets rich. When it comes to unemployment, the glass is half empty as the youths of India become increasingly irate at not being able to get jobs.

Jobs, Jobs and Jobs

While India recently surpassed the United Kingdom in becoming the fifth-largest economy, millions in India continue to remain unemployed. India has lost in commodity manufacturing. Taiwan, China, and Vietnam have the upper hand in product manufacturing because of their trained labour and high-quality machines, he quipped. India is moving from the back office to the front office, with the consultation and service sectors booming in the last century, replacing the agriculture sector. He added that India is missing the biggest opportunity to create intellectual property. There is no Indian car brand that is sold all over the world. With conditions of creative economy growing, India is realizing that the valley is not where the value is, he added.

Power of Education

"Breaking the Mould" is an optimistic book that attempts to address the economic issues of India. During the talk, Mr Rajan added that upscaling all jobs would be the most effective strategy to address the issue of unemployment. By concentrating on government reforms and improving all the educational institutions, we could enhance human capital and intellectual property. We could lay the foundation for a creative economy by focusing on strengthening primary education and nutrition for the children of the country and better-quality higher education institutions. A creative economy would promote the zeal of entrepreneurs, which would result in significant change, he said. "The power of education would take India a long way," stated Rohit Lamba, the co-author of the book. He went on to say that in order for us to see a change, political leaders must take the issue seriously. India is unable to draw companies because of its poverty of intellect and ambition, which has resulted in generations of unskilled labour. Decentralising India's educational system and empowering people on the ground with a lot of checks and balances will enable entrepreneurs to become the trailblazers of the country. It is important to bolster the weak link that exists between those in need and those who provide, he added.

The discussion emphasized how exploiting India's existing talents and strengthening the supply side by generating more competent and skilled labour can increase the income level of the country. Debating and engaging with the idea that, although progressing at a startling rate, India will eventually need to make some drastic adjustments in order to transform from one of the world's poorest democracies into a more flourishing country.