India’s growth path lies in leveraging its internal strengths and becoming central to global supply chains by building on its historic culture of tolerance and respect for all, former Reserve Bank of India Governor Raghuram Rajan said here on Friday.
He emphasized that India has the potential to take a leadership role in the services sector and strengthening the country’s liberal democratic values is an economic imperative to gain the world’s confidence in this endeavour.
Referring to competition with a low-cost manufacturing neighbor like China, a leading economist said India would benefit from focusing on the services component of manufacturing, or services more directly, as a trusted global supplier.
“Our independent judiciary, our liberal democracy, these are critical assets if we are to embark on this path of growth based on manufacturing services because it will enable us to gain the trust of the world; it is indeed necessary,” Rajan said in his keynote speech at the “Ideas for India” conference.
“We want democracy as Indians, but we also want democracy to be able to convince the world that we can be trusted, that we can be effective service providers of this kind… we have to do our homework in strengthening our institutions, in strengthening our democracies,” he said .
A well-known academic from the University of Chicago, using the example of 5G technology, pointed out that the world would not trust such critical infrastructure sold by an “authoritarian neighbor or an authoritarian country” because there would be concerns about backdoors, built-in.
“When you provide consulting services, you have to convince the other party that you’re not getting a back door into their companies to find out what they’re doing and then use that to gain an advantage or blackmail them.
“For that you have to convince them that you are bound by the rule of law… for that we need to strengthen our democracy, our checks and balances, our data protection laws. It is in our economic interest and competitive advantage compared to the Chinese and the Vietnamese.” and Russian companies,” said Rajan.
He emphasized that the country should focus on its human capital and focus on producing more products that are already available in abundance, such as chips, and focus on value-added chip design.
“If we produce 10,000 high-quality engineers a year, we can be a global representative in chip design. So why not do that rather than pouring money into a bucket that is very deep… as a country with limited resources, we need to spend much smarter,” he said.
Asked if he sees enough positives in this growth path from the ongoing talks on a free trade agreement (FTA) between India and the UK, Rajan reiterated the importance of capitalizing on trade in the services sector, which goes beyond agriculture and manufacturing.
Read Now:NASA has selected five new research teams to support future lunar exploration
