“I have questions for the government…” Former RBI Governor Raghuram Rajan spoke about the jobs in India in an exclusive interview with Brut. Watch the full video on YouTube.
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00:00Whatever the government's strategy, after 10 years, it should start saying,
00:04where are the jobs that we were promised?
00:06I have questions for the government. You announced three schemes last year.
00:09What has happened to those schemes?
00:13You mentioned China and there's Vietnam, of course.
00:15So it almost feels like the low-skilled manufacturing race.
00:20I don't think India is anywhere close to in that race.
00:25We don't have the edge in it in terms of low-skilled race.
00:28Where do you see this in terms of the high-skilled folks that we have in India?
00:32And do you really think that's a race that we can win when it comes to becoming competitive?
00:38I think we need to revisit the idea that manufacturing is necessary
00:43for significant job creation.
00:46I think that's something this government has made clear in the last 10 years.
00:50It has been completely unsuccessful at it.
00:54And not services.
00:55If you look at the last five years, look at the data.
00:59Forget big talk. Look at the data.
01:02How many jobs have been created in manufacturing?
01:05It turns out around 10% of the total job creation.
01:09How many in services? 20%.
01:12Both are somewhat lower than our presence in those areas.
01:15So in terms of job creation, where has the job creation been?
01:19In agriculture, 54%.
01:23And in construction, 17%.
01:26So the point here is that whatever the government strategy,
01:31after 10 years, it should start saying, where are the jobs that we were promised?
01:35And those jobs are simply not there in the data.
01:38Yeah, I know Tata say, oh, we're creating 60,000 jobs here.
01:42And somebody else will say, we're creating so many jobs there.
01:45But when you add it up, our need for jobs is at the rate of around,
01:52if you think about it, about a million a month.
01:54More than a crore a year.
01:57And 10 crores over 10 years.
01:59What is a few lakhs?
02:02Even if you say the whole PLI, 60 lakhs.
02:05Compared to the 10, 12 crores we need over this time,
02:08just to keep those people coming to the labor force employed,
02:13forget the employing those who never had work.
02:20I think the government has to wake up to the fact
02:22that we are in serious risk of losing out on the population dividend.
02:27If you look at labor's contribution to growth,
02:31it is actually falling behind,
02:34which it should not when we have so many young people coming to the labor force.
02:38Labor's share of growth should be increasing at this point,
02:41because these are people going into productive jobs and creating more value.
02:46So I think what we are missing out.
02:49Now, what I'm saying is, it is not that we can't do any manufacturing.
02:55We should get all the manufacturing we can.
02:57But let us recognize that there are three forces against us.
03:04One is automation.
03:05That's happening everywhere.
03:07Second, protectionism against us.
03:09Everybody wants their own manufacturing industry.
03:11We're not the only ones.
03:13And when the West wants a manufacturing industry,
03:15who are we going to export to, right?
03:18It's going to be limited.
03:19The third is that Vietnam and China are not leaving those places.
03:23Typically, what used to happen in Asia is that as you got more sophisticated,
03:31you used to move up in the manufacturing ladder
03:34and leave the low-skilled manufacturing for others.