Former Chief Economist of the International Monetary Fund Raghuram G. Rajan on Sunday said India's growth will increase if it shifts focus from low productivity agriculture to industry or services and at the same time increases agricultural productivity by rapid mechanisation.
Delivering the sixth New India Foundation Lecture on “Fault Lines: India in the World Economy” here, Prof. Rajan said the growth will also increase as greater shares of workers enter the labour force. However, the country has to increase the reach of education and improve productivity in each sector, he noted.
The main bottleneck for India's development, however, has been the prevalence of inequality in many sectors, including the rural and urban divide, coastal and interior divide and even the “political capture”.
Stating that India is in a similar position as the United States in 1910, Prof. Rajan said greater awareness about transparency is developing among people in India.
Transparency is highly essential for smooth delivery of government services and its absence had been the reason for greater inequalities in India, he felt.
Acquisition of land for creation of infrastructure and other purposes should be transparent, he pointed out.
Media can play a greater role in ensuring transparency in governance and will be of much help in development, the economist noted.
More of investigative journalism, including covering aspects of business without bothering about advertisements, could do wonders, he said.
The solutions for India's problems lie in political adaptation to the changing trends and exploiting the benefits of technological advances, including the unique identification number, land mapping and registers and mobile banking. There should be more competition to provide public services.
India has come a long way and is well positioned after the global economic crisis and if the country plays its cards right, the best is yet to come, he said.
Unique Identification Authority Chairman and one of the founders of the New India Foundation Nandan Nilekani, who presided over the function, also moderated the question and answer session that followed the lecture.
Earlier, introducing Prof. Rajan, Mr. Nilekani said the UID project was taken up based on the economist's suggestion. The foundation's managing trustee, Ramachandra Guha, was present.