At the World Economic Forum in Davos,Former RBI Governor Raghuram Rajan shared the Modi government is doing what it can to create physical capital but more effort should be put into human capital to create enough jobs. Rajan pointed out that many intelligent Indian students are not getting admission to premier institutions like IITs despite having the potential.
Raghuram Rajan tells how India can solve employment issues
"I was meeting an NGO here. He was saying we’ve got all these bright kids...really poor kids, we identified them, they're really smart but they can't get into the IITs, they can’t get into the tech colleges,” Rajan said. [Source: Business Today]
"So, we have a thin layer of very good schools, very good universities. Can we expand that? Because that's where we are getting the people who are creating new jobs. Maybe it's to shift the focus of government spending," he added when asked about the government’s role in increasing job opportunities in the private sector.
Now, the Finance faculty at the Booth School of Business, Rajan remarked, "You can talk a good game as a politician and say we're going to grow but these are hard-bitten business people and unless they see the underpinnings or they have this animal spirits from somewhere it's going to be very hard to get them to put their money in the ground."
Rajan also said though the country’s economy is growing at a healthy 6%, it may not be enough when considered in per capita terms.
“The Modi government has done a lot of good work on infrastructure, but the other key pillar that needs focus is the job market,” the former RBI Governor commented.
With the Union Budget approaching shortly Rajan expressed optimism saying, “There is a strong necessity to boost the job market and hopefully, we will see something in the Budget.’