Raghuram Rajan warns that India is making a big mistake by believing the ‘hype’ about its growth

Former Reserve Bank of India (RBI) governor Raghuram Rajan made light of Prime Minister Narendra Modi’s ambition to make India a developed nation by 2047, calling it “nonsense.”

In an interview to Bloomberg, he said it is “nonsense” to talk about India being a developed economy if “so many of your kids don’t have a high school education” and the rate of drop-outs is high.

He further said the greatest mistake India can make is to believe the hype around the country’s strong economic growth and observed that “we have got many more years of hard work to do to ensure the hype is real.”

Rajan said that politicians want everyone to think things are going great because it makes them look good. But he warned that India shouldn’t get carried away by this idea. Instead, he stressed the need to focus on real problems.

He emphasized the importance of making sure people have the right skills for jobs and that there are enough jobs available for them. Rajan said that having a lot of people ready to work is only useful if they can find good jobs.

Talking about kids dropping out of school, he mentioned studies showing that many Indian kids are struggling to read at their grade level. He said only about one in five third-grade students can read at a second-grade level.

Rajan also criticized the government for spending too much time and money on flashy projects like making computer chips, while not paying enough attention to fixing the basic problems in education. He worries that India is more interested in looking impressive than in building a solid foundation for important industries like chip manufacturing.