Emphasizing that the National Education Policy is a good policy, former RBI Governor Raghuram Rajan said it needs to be implemented with a mission in mind. He also stressed the need for a longer framework for job creation and a strong education system that leads to a good workforce.
During an interaction on their latest book (Breaking the mold, Reimagining India’s Economic Future), Rajan and economist Rohit Lamba argue that India needs to overcome the “China fetish” and create a niche where its expertise lies – embedded service manufacturing rather than competition China is unlikely to make room for a pace of low-skilled manufacturing. Rajan said the Chinese model of authoritarian, centralized, manufacturing-led growth would have worked well twenty years ago, but it would be difficult to replicate that path for India now.
“We argue in the book that India is very good at service-integrated manufacturing. For example, a large portion of the input in a modern car consists of services such as writing code. This is a service that is embedded in an end product. We have a lead there and are very good at it. Estimates suggest that a fifth of chip design takes place in India while we spend Rs 16,500 crore to set up a Micron facility. “We already have a head start on the design of the chips,” Lamba said, adding that this should not be construed as being in opposition to manufacturing, but that it is just a matter of priorities.
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