"Parachute Economist": Raghuram Rajan Called Out For Saying India's Economic Growth Is Hype

Former RBI governor Raghuram Rajan has faced criticism for his recent comments on India's economic growth, where he suggested that the country should not believe the hype surrounding its strong economic performance.

In an interview with Bloomberg, Rajan highlighted significant structural issues that need to be addressed, stating that India still has many years of hard work ahead to achieve real economic growth.

Rajan emphasised the need for India to address its structural problems, such as the poor education and skills of its workforce, before it can reach its full potential.

He suggested that the new government, formed after the 2024 general elections, should prioritise addressing these longstanding issues as per a report by NDTV.

According to Rajan, it would be "nonsense" to talk about India becoming a developed economy by 2047 if many children still lack a high school education and dropout rates remain high.

His comments have sparked a debate, with some economists dismissing his arguments as "silly" and disconnected from the ground reality in India.

Mohandas Pai, Chairperson of Manipal Global Education, criticised Rajan's remarks, pointing to improvements in school dropout rates, increased college enrollment, and significant job creation.

NITI Aayog member and macroeconomist Arvind Virmani also expressed his disagreement with Rajan, comparing his comments to those of "parachute economists" who comment on India without a deep understanding of the country's situation.

Rajan, who is currently a professor of finance at the University of Chicago's Booth School of Business, stressed the need for India to strive for 8 per cent sustainable growth. He also criticised the government's focus on high-profile projects like chip manufacturing, suggesting that more attention should be given to fixing the education system.