Raghuram Rajan’s concern: ‘Will Indians become rich before India grows old?’— ex-RBI governor on demographic dividend

Raghuram Rajan recently asked a thought-provoking question: Will the demographic dividend lead to a rich India, or will the country face the burden of an ageing population? He says India's performance on the global scale seems good compared to rich countries.

Reported By Fareha Naaz
First Published20 May 2024
Former RBI governor Raghuram Rajan noted that India had recently surpassed the United Kingdom in terms of GDP and became the fifth-largest economy in the globe.
Former RBI governor Raghuram Rajan noted that India had recently surpassed the United Kingdom in terms of GDP and became the fifth-largest economy in the globe.(PTI)

Former Reserve Bank of India (RBI) governor and renowned economist Raghuram Rajan recently posed a thought-provoking question during an interview with CNN, “Will Indians become rich before India grows old?” 

While reflecting on India's unemployment situation, Rajan observed. “Even if India is the fastest growing economy in the G20, it is also the poorest country. Young people are coming into the labour force in massive quantities. If we could employ them, India would grow much faster.”

Also read: Raghuram Rajan draws flak for comments on India's growth, experts call him 'parachute economist'

He pointed out that India is currently benefiting from its demographic dividend. He emphasised that the economy can reap the potential benefits of economic dividend if the young workforce that India has can be effectively employed.

The former RBI governor also compared India with China, the second-largest populous country in the world. He noted that India has recently surpassed the United Kingdom in terms of overall GDP and has become the fifth-largest economy globally. India's performance on the global scale seems good in comparison to rich countries. 

Also read: 'Greatest mistake India can make...': Former RBI Guv Raghuram Rajan cautions against believing ‘hype’ about growth

“Also, we have a large population, so we are overtaking countries in terms of overall GDP… Soon, India will overtake stagnant Japan and Germany to become the third-largest economy, ” he noted. 

However, he stated that "the real issue is: Can Indians become rich before India grows old?”

Raghuram Rajan expressed concern over India's demographic transition, stating that by 2047-2050, India's demographic bulge will translate to an ageing population. He pointed out that a growth rate of 6-6.5 per cent would not be sufficient to ensure prosperity. He added, "By 2047-2050, we are going to start growing old. Are we going to be rich by then? Not at 6-6.5 per cent growth.” 

Also read: ‘Young India has a Virat Kohli mentality that…,’ says ex-RBI Governor Raghuram Rajan

He also pointed out that an authoritarian government is more successful in infrastructure development, referring to the BJP-ruled government led by Prime Minister Narendra Modi. However, the needs of a major chunk of the population should be addressed timely. "No country has ever succeeded by treating a large part of its population as second-class citizens," Rajan said.

"They should get the sense of progress, that things are getting better. You cannot reverse the environment of equality that India has enjoyed since independence,” he opined. 

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.MoreLess
HomeEconomyRaghuram Rajan’s concern: ‘Will Indians become rich before India grows old?’— ex-RBI governor on demographic dividend

Most Active Stocks

Bharat Electronics

318.00
09:13 AM | 18 JUN 2024
8.45 (2.73%)

Tata Steel

180.75
09:13 AM | 18 JUN 2024
-2.3 (-1.26%)

ICICI Lombard General Insurance Company

1,745.05
09:13 AM | 18 JUN 2024
15 (0.87%)

Indus Towers

336.50
09:13 AM | 18 JUN 2024
-4.3 (-1.26%)
More Active Stocks

Market Snapshot

  • Top Gainers
  • Top Losers
  • 52 Week High

Fertilizers & Chemicals Travan

850.00
09:04 AM | 18 JUN 2024
70.4 (9.03%)

Schneider Electric Infrastructure

882.10
09:03 AM | 18 JUN 2024
71.8 (8.86%)

Avanti Feeds

645.50
09:03 AM | 18 JUN 2024
50.1 (8.41%)

HFCL

126.95
09:03 AM | 18 JUN 2024
9.15 (7.77%)
More from Top Gainers

Recommended For You

    More Recommendations

    Gold Prices

    • 24K
    • 22K
    Bangalore
    73,519.00-431.00
    Chennai
    73,806.00646.00
    Delhi
    73,519.00-144.00
    Kolkata
    73,375.00359.00

    Fuel Price

    • Petrol
    • Diesel
    Bangalore
    102.86/L0.00
    Chennai
    100.75/L0.00
    Kolkata
    103.94/L0.00
    New Delhi
    94.72/L0.00
    OPEN IN APP
    HomeMarketsPremiumInstant LoanGet App