India not reaping benefits of demographic dividend, says former RBI Governor Raghuram Rajan

India is not reaping the benefits of its democratic dividend and needs to focus on improving human capital and enhancing skill sets, former Reserve Bank Governor Raghuram Rajan said on Tuesday, reported PTI.

“I think we are in the midst of it [demographic dividend], but the problem is we are not reaping the benefits,” PTI quoted Rajan as saying at a conference at The George Washington University in the United States.

The demographic dividend refers to the economic growth potential that stems from a country’s working-age population being larger than its non-working population.

“That’s why I said 6% growth – if you think that’s about what we are right now, take away the fluff in the GDP [Gross Domestic Product] numbers,” the former reserve bank governor said. “That 6% is in the midst of a demographic dividend. It is much below where China and [South] Korea were when they reaped their demographic dividend.”

Rajan added that India is being “overly complicit” in claiming that its current economic growth “is great”, despite high levels of unemployment among its working-age population. He said that this leads to the question of how India can create the required employment opportunities.

“The answer to my mind is partly enhancing the capabilities of the people we have, partly...

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