Social media, fake news can’t divert for long, jobless youth will hit the streets: Raghuram Rajan
The former RBI governor cautioned against import substitution under the ‘Atma Nirbhar Bharat’ initiative of the Modi government
Former governor of Reserve Bank of India Raghuram Rajan on Wednesday said that if India does not create enough jobs, youths will come to the streets (in protest).
Cautioning that attention can be diverted by using social media and fake news but eventually it will fail, he asserted, “Young people without jobs can be diverted to this and that for a little while. But they are going to come to the streets if they don't create jobs. We can use social media, fake news to divert things but eventually, it is going to fail”.
He also cautioned against import substitution under the 'Atma Nirbhar Bharat' initiative of the government.
He was speaking at a webinar organised by the Centre for Financial Studies at Bhavan's SPJIMR.
"If the focus (under Atma Nirbhar Bharat initiative) is on import substitution by erecting tariffs, which we have done a lot of in the last few years, then I think it is a direction we have tried before and it has failed. I would caution against going in that direction," said Rajan.
Rajan said in order to export, one needs to be able to import things that go into those exports as cheaply as it can.
Referring to China’s growth, Rajan said that China's rise as an export power came on the back of assembly. “It brought in the stuff, put it together and exported it out. In order to export, you have to import. Don't erect huge tariffs and focus on creating the right environment for production in India," he said.
According to Rajan, targeted spending by the government can be fruitful in the longer term. Saying that “it is good to keep an eye on the overall spending”, Rajan said, “Targeted spending can repay a lot if it is done wisely and carefully”.
He further said the country's growth has been significantly hit but it is more important to understand the consequences of that slowdown on the economic system.