He said that India’s development strategy should be broad and cover many areas. To boost growth, India should increase investment, focus on agriculture, manufacturing, and services, adopt new technologies, and support a mix of sectors that create jobs.
On August 3, former RBI Governor C. Rangarajan warned that India’s push for self-reliance, known as “Atmanirbhar,” should not lead to inefficient ‘import substitution.’
Speaking at the 14th Convocation of the ICFAI Foundation For Higher Education, Rangarajan cautioned that, due to supply disruptions from the Russian-Ukrainian war, many countries are looking to become self-sufficient in critical imports. He emphasized that India must avoid falling into the trap of ineffective import substitution.
Rangarajan suggested that India’s development strategy should be comprehensive. To boost growth, he recommended increasing investments, focusing on agriculture, manufacturing, and services, adopting new technologies, and supporting a range of sectors that create jobs.
He pointed out that any attempt at import substitution must consider costs. Expensive import substitution is not beneficial for anyone. Efficient import substitution is what’s needed, and India should avoid falling into outdated import substitution practices.
He also noted that while job creation is crucial, it should not come at the expense of growth. Addressing job creation and integrating new technologies will be challenging, both in India and globally.
Rangarajan mentioned that, based on assumptions about future exchange rates and domestic inflation, India needs to achieve a real annual growth rate of six to seven percent to reach a per capita income of over $13,000 by 2024.
He concluded that while India should be proud of its achievements, there is a pressing need to enhance the quality and effectiveness of higher education. He highlighted three key areas for reform: access, equity, and quality.