IMF Podcasts Raghuram Rajan on Blazing a New Path to India’s Development
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Aug 15, 2024 
Raghuram Rajan, former Reserve Bank of India governor and co-author of 'Breaking the Mold,' joins Rohit Lamba to discuss innovative strategies for India's growth. They emphasize shifting from traditional labor-intensive manufacturing to harnessing human capital. Rajan critiques the outdated development paths of other emerging markets, advocating for service-oriented growth and improved education. The hosts explore India's Production Linked Incentive scheme, the necessity of structured apprenticeship programs, and the importance of local governance in sustainable development.
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Breaking the Mold: A New Path for India
- Raghuram Rajan argues that the traditional emerging market development model, focused on labor-intensive manufacturing and exports, is becoming less effective.
- He suggests a new path, "breaking the mold," by focusing on services, both domestically and internationally.
Beyond Subsidies: Focus on Fundamentals
- Rajan advises against relying on subsidies like India's PLI scheme to boost manufacturing.
- He suggests focusing on improving the business environment and workforce quality instead.
The Missing Link: Skills and Job Creation
- Manufacturing's share of India's workforce hasn't increased in 40 years, while labor-intensive sectors have shrunk.
- Rajan highlights the disconnect between available labor and industry's need for specific skills.