Rajan Highlights Need for Comprehensive Reforms to Propel Make-in-India

Former RBI Governor Raghuram Rajan discussed India's progress in infrastructure over the last decade while emphasizing necessary reforms in local manufacturing and job creation. He praised the 'Make in India' initiative but highlighted areas needing improvement. Rajan called for enhanced ease of doing business and more inclusive government policies.

India has achieved significant progress in infrastructure over the past decade, yet substantial reforms in local manufacturing and job creation are still crucial, as per former RBI Governor Raghuram Rajan.

In an exclusive conversation with PTI, Rajan commended the government's focus on production but stressed the importance of executing it correctly.

Reflecting on the Modi government's flagship 'Make in India' initiative, launched on September 25, 2014, Rajan remarked, 'The intention is commendable, and meaningful progress has been made in infrastructure. However, more needs to be addressed.'

Rajan advocated for a critical assessment involving feedback from critics to enhance other sectors. He also pushed for greater ease of doing business, highlighting that it would strengthen the 'Make in India' concept.

Further, Rajan, now a finance professor at Chicago Booth, recommended asking local businessmen about their challenges instead of solely adhering to global ease of doing business criteria.

Rajan underscored that constructive criticism should be welcomed and not dismissed due to alleged vested interests. He highlighted various government initiatives aimed at boosting local manufacturing, such as production-linked incentives, eased FDI norms, and a national logistics policy.

Regarding India's economic aspirations, Rajan suggested that a 7% growth rate could potentially position India as the third-largest economy. However, he voiced concerns over achieving developed nation status by 2047, advocating for accelerated growth to meet a per capita GDP target of USD 15,000.

Discussing the feasibility of economic reforms under a coalition government, Rajan pointed to PV Narasimha Rao's era as an example of successfully pushing through reforms with a consensus-driven approach. For Modi's potential third term, Rajan emphasized that the single most crucial reform should focus on education.

(With inputs from agencies.)