Raghuram Rajan: Need revolution in education, skill building

Former RBI Governor Raghuram Rajan on Friday batted for the country to have a revolution in education and skill building and bringing talent back from abroad. Currently teaching finance at University of Chicago`s Booth School of Business, Rajan said: "We are not as global as we should be". "Too many of our people are too poorly educated or skilled to compete in a globalised tech-enabled economy. If we don`t do that we will end up with a two-tier economy of a few `haves` and a vast population of `have-nots`, which is neither socially stable nor desirable," said Rajan during a keynote address outlining his vision for India at the #FUTURE Global Digital Summit organiSed by the Kerala government here.

Accelerating the pace of growth and technology adoption was what he emphasised on during his half-hour talk. "Even as we improve infrastructure and logistics through the massive investments that we envisage, we have to recognise that the export-led growth path is closing quickly, partly as a result of political movements in the West to build tariff walls, and partly because technology is allowing them to bring back the jobs into their country through customised machine-based programmes utilising less labour," he said. He also warned that the global economic recovery is likely to be hit if the trade war intensifies between the US and China and wished better sense prevails. According to him, politics is one of the reasons that change does not happen fast enough.

"Any change hurts the incumbents and those incumbents strike back. Today the mood against trade is often really a disguised move against technology. You can`t proceed against technology, but you can against trade. Ultimately the cause is the loss of jobs."
"India needs to join the global supply chains sooner rather than later, so we have positions there that we can defend," he said, adding that "we need to keep a focused tariff regime to be able to do so".