The Former Governor of the RBI Raghuram Rajan delivered a virtual lecture on the second day of the Aligarh Muslim University Literary Festival 2022, India’s largest students run Literary Festival, at the historic Kennedy Hall Auditorium, Cultural Education Centre, AMU. The lecture was on liberal democracy in the context of Indian development.
For the last event on the second day of the AMU LitFest 6.0, there was a Lecture on the topic ‘Why Liberal Democracy is Necessary for Indian Development?’
Rajan began his lecture by mentioning the common opinion that India needs a strong, even authoritarian, leadership if it expects to witness sustained growth, and added that he believed this argument to be totally incorrect and outdated.
“If we allow our liberal democracy to crumble into an authoritarian one, it is not only our economic future that is at stake but also our soul as a nation.” He went on to talk about the imbalance between government sector jobs and the private sector, emphasizing the fact that the current structure for reforms in the employment sector relies on previous failed models that rely more on physical capital rather than human capital.
The crux of Rajan’s talk rested on the idea of liberal democracy and service sector-led growth as an alternative to manufacturing sector-led growth in the country. Instead of spending the limited resources that the country has on subsidizing manufacturing industries, as suggested by Rajan, they should be spent on things like welfare, education, healthcare, etc. For the development of the service sector in India and to export services abroad, Rajan said that he believed the environment to be favourable at present because working remotely has become the norm.
Apart from focusing on new thrust areas aside from the manufacturing industries, Rajan said that because we are treading a new path, the present government is required to be more pragmatic and transparent. “In order to draw our best talents, […] we absolutely must be non-discriminatory.”
Mentioning the worth of Aligarh Muslim University, Raghuram Rajan said “I think you are a great University, I think your founder was a far-thinking man in his time, and India has benefited tremendously from your alumni.”
Answering a question regarding the welfare state, he stated, “the role of the government is also to look to longer-term needs, not just shorter terms need.” On a question regarding alleged favouritism to white men during his tenure as RBI governor, he replied, “the truth is that there is a lot of tension between RBI and Finance Ministry as the Ministry loves to lower interest rates and gets immense pressure from industrialists, the RBI, on the other hand, has to worry about keeping inflation under control.”
“certainly the kind of allegations that have surfaced, that particular finance secretary and I didn’t get along and Mr. Jaitley told that he accused the RBI,” he added.