Raghuram Rajan: Former Reserve Bank of India Governor Raghuram Rajan has said that even with seven percent GDP growth, India is not creating enough jobs. This can be gauged from the number of applicants for vacant posts in some states. He has suggested that the government needs to focus on promoting labor-intensive industries to create employment. 

Rajan further said that some Indians, especially at the higher end, are in a comfortable position and their income is high. But in the lower half, consumption growth has still not improved and it has not reached the pre-Covid level. 

This is unfortunate: Raghuram Rajan

The former RBI governor was asked whether the Indian economy growing at seven per cent is creating enough jobs? Responding to this, he said that it is unfortunate. You would think that with seven per cent growth, we would create a lot of jobs. But if you look at our manufacturing growth, it is more capital intensive. Capital-intensive industries are growing more rapidly, but this is not the case with labor-intensive industries.
 
Raghuram Rajan further said, "All is not well at the bottom level. I think there is a dire need for jobs. And you can see it. Forget the official figures. You can see it in the number of applications for government jobs, which are very high. 

Need to focus on apprenticeship scheme

Rajan, currently a finance professor at Chicago Booth in the US, said the Indian economy will grow at a rate of six to seven per cent in the medium term. He welcomed the 'apprenticeship' schemes announced by the finance minister in this year's budget, but said that we have to keep a very close eye on it, see what works, and what works has to be expanded further. 

Countries like Vietnam and Bangladesh are doing well in labour-intensive industries like textiles and leather. On this Rajan said that we need to look at this (labour-intensive industry) very, very carefully, we cannot stay out of it. 

India should take advantage of demographic dividend: Rajan

Asked why the private sector is still lagging behind in capital expenditure, Rajan said it is a bit of a mystery. "When you look at capital utilisation (of the private sector), it is around 75 per cent. It seems that demand has not reached the point where they feel this kind of investment is needed," he said. 

Rajan said that the important thing is that India has a short time of 15 years to take advantage of the demographic dividend and it should not miss this opportunity.