Raghuram Rajan on why democracy is ‘biggest advantage’ for India’s economy

[Music] today it's all about you hurt my sentiment so I'm going to be angry with you I'm going to sue you I'm going to put you in prison that's not the India that we need if we want to be an idea superpower over the last so many decades people have argued that democracy holds back Indian growth and development that what India needs is strong leadership China has built tens of thousands of miles of highspeed rail while we're struggling to build the uh Railway between Mumbai and Amad even though this is a show project of the current government we're not competing with the workers in the United States we're not competing with the workers in the in the United Kingdom we're competing with workers in Vietnam who are really cheap think of the extreme where a few Tech trillionaires own chat GPT Plus or variants of that and nobody else has a job is that a society that can sort of survive and the answer is no I have found in the last 30 years news has had the opposite effect the more players they are the quality of news has gone down I think decentralized governance can be a big factor in improving the quality of Public Services that we we get in India allowing for Rebellion uh allowing for different thinking sometimes that's the beginning of uh you know great out of the box thinking um Einstein wasn't a great student thank you Dr Rajan for coming here I won't take long in introducing Dr Rajan he needs no introduction uh he has held positions of immense importance and significance in the past he's an economist of world renown uh and most famously he had predicted uh crash in 2008 for which he is still uh remembered uh so I can't wait to see what he has to say so we will take it straight to him after he's finished with his speech uh we shall take questions from the audience I will just keep one question because I know there many from the audience who' like to ask questions so we'll save as much time for that as possible over to Dr Rajan well thank thank you very much uh and thanks for inviting me here it's a great pleasure to be with all of you so um what I thought I'd talk about uh sort of U very related to what you just heard is uh the road ahead for India and and the road ahead uh obviously I'm an economist I'm going to talk a lot about the economics but I I think the road ahead is also about the politics how the politics F fits with economics in other words the political economy so I start with the notion that uh you know over the last so many decades people have argued that democracy holds back Indian growth and development that what India needs is strong leadership authoritarian leadership even which will not have checks and balances on it and which will do what is needed for Indian development and and what people have in mind when they say this is something like China a a model which emphasizes the production of goods and capital not ideas and human capabilities and they want India to follow that path which has been extremely successful in China in East Asia the export-led growth model now China is seeing the limits of that model and is trying to change and I would argue that we need to be cognizant of all the limitations there as well as how the world is changing and in fact what we need now is a truly Indian way and I'm going to make the case for that today so let's start with what alarms people about India's growth in the last few decades and it's the extent to which Indian job growth especially growth out of Agriculture has been in services and construction not in manufacturing the traditional path is people leave agriculture for manufacturing manufacturing grows eventually manufacturing starts declining as people start demanding more goods and services and as manufacturing becomes really productive and then people move into services and ultimately Services becomes dominant uh today in most western economies Services account for 70% of GDP uh most developing economies typically agriculture is really dominant then manufacturing sort of increases China it's about 35% of GDP and then eventually it starts going down India it hasn't gone Beyond 20% of GDP for four decades now so India's been stuck in some sense in manufacturing now within services we've expanded uh we account for a lot more of GDP through services this is not just uh you know low-skilled consumer services there's a lot of it retail hotels restaurants Leisure but also construction uh think of the kirana shop as the typical uh sort of service firm small uh and uh not not high in scale but there's also been an explosion in the last few years in what one calls producer services it design Finance legal Consulting and an explosion in those exports in the last few months something that is worth noting and these employee is small but fast growing share of the population especially high-skilled professionals so we've got low skilled services but we also got high skilled Services now have we missed the manufacturing bus all together absolutely not we have a strong Global presence in some areas two- wheelers for example with with the world's largest manufacturer there's a lot of exports going into Africa um more recently uh you know Royal Enfield started exporting its uh uh some motorcycles to the land of the the Holly Davidson and uh we've seen whiskey being exported from India to Scotland so uh you know we can make things but typically these are areas where uh not only do we have strong domestic demand for example two wheelers but skills like R&D and design are important think Pharmaceuticals uh certain amount of R&S is is useful where do we do less well is low-skilled manufacturing where low tariffs strong Logistics and transport reliable and cheap power ease of doing business easy land acquisition and a decently educated but doile and importantly doile labor force are needed to be comparative we simply don't have all these we don't check all these marks and this is where the bulk of low-skilled manufacturing jobs are the world over and these jobs are also decreasing so question is why didn't we get these jobs uh earlier why did China and Vietnam succeed now on the positive side communist economies emphasize primary and secondary education to a far greater degree than we did in the early part of our democracy and they have ample numbers of moderately educated workers the kind that can do the moderately skilled labor that that modern industry requires moreover their authoritarian states can acquire land easily and build out infrastructure I mean uh democracy like us because of all the checks and balances because somebody like L mangeshkar uh could protest the fly over outside of outside a window and stop that in its tracks that's why we simply cannot build out infrastructure as far as as fast as everyone else in the Communist World China has built tens of thousands of miles of High-Speed Rail while we're struggling to build the uh Railway between Mumbai and Amad even though this is a show project of the current government it probably will as a last checked it's going to be finished in 2028 many years after it was announced even though all the weight of the government is behind it that's just the fact of our democracy we build infrastructure more slowly think about trying to build out infrastructure in a uh you know what we have is a first world Civil Society and almost a first first world democracy but we have a second world government capacity and therefore it becomes much harder to do the things that in this country or in the United States think of building a highway in the United States today it would take a long long time because of the various permission and and so on needed as well as the Nim opposition that would set up so India does that less well but also um a lot of progress in China was made by local governments opening doors to favored businesses and removing bureaucratic and Regulatory impediments to growth in other words as my colleague Chang ta at Chicago says competitive crony capitalism was a feature in China's strong growth you needed help from the local government to break the rules and that allowed local Champions to emerge similarly uh a key feature in China's growth was a suppression of labor unions and activism so that you kept wage growth below the growth of productivity of Labor productivity and you also kept uh the rates that were paid to Savers below comparative World rates so cheap Capital cheap labor helped Chinese firms and help them grow tremendously in the long R this benefited the Chinese population but it did require a suppression of these kinds of Market forces now we cannot do all this it's not even clear that we want to do it do we really want oppressive labor conditions do we want to suppress our unions to make sure that wage wages don't don't match productivity we also have scored our own own goals right we've made it harder for firms to grow in size without significant additional burdens the you know economists have complained about Indian labor law laws for long which protect only a few workers while leaving many unprotected and hurt both the employer as well as the employed we can do better we should do better but we haven't done so so far similarly we have an ambivalent attitude towards protectionism we raise tariffs at you know whenever some part of the uh production uh sector is hurt depending on the extent of lobbying and this kind of random tariff change makes it very hard for Global Supply chains to come through India we're not part of regional uh trade agreements again makes it hard for Global Supply chains to come to India so we do need to do our homework also but the net effect of all this is it's been very hard to do manufacturing off the scale that China is doing or off the scale that Vietnam is doing in India now the government has been trying to make amends and the way it it says this is look there are all these def efficiencies we have that's that's a realistic acknowledgement we're got to pay for that with what are called production linked incentives if you make in India we will pay you some fraction of the final price for you to make in India to offset some of these deficients and the idea somehow is look you start Manufacturing in India you'll bring some of your activity to India the supply chains will start emerging and all this will grow it's a it's a fine idea but we need to check whether it works in practice and the the the place where we started this relatively early was cell phones we applied big tariffs on cell phone Imports in 2018 ensured that cell phones somehow had to be quote unquote manufactured in India and today we have cell phone exports problem is D the data has to be looked at very carefully Have We Become a global manufacturer of cell phones and the reality is yes we are exporting cell phones but what we're doing is really basic assembly which accounts for a really small fraction of cell phone value in other words whatever we exporting we importing 90% of what we export the value added in India is really small um a journalist recently wrote a piece saying we're adding a lot of value he had the wrong numbers when you look at the numbers of what we're importing and what we're exporting we're still doing assemblies we've expanded Beyond ass assemblies to subassemblies this is the lowest part of value added in the cell phone take an apple cell phone right iPhone it retails for $1,299 what fraction of it is manufacturing it turns out a third is manufacturing 2/3 is the service content of an iPhone okay often that one3 in manufacturing about 90% is Parts the chip the um the uh you know the uh the face the uh motherboard all that stuff is is is sort of stuff that goes in the assembly is 2 to 3% of the value of the cell phone we doing that we're not doing the rest the rest is where the value is the rest comes from intellectual property it comes from design it comes from R&D it comes from the brain not the brawn today that is true of almost every product that is manufactured and so really the question is should we be competing for the brawn or should we say byon be byon we can't compete for that those guys you know let them take it we want to compete for uh the brain now I I'm not saying uh we immediately move to U you know just just you know the intellectual property there are many places where we can add substantial value also in manufacturing um the service component of manufacturing I always I've already talked about but angry industry is a big place where India can contribute a lot of value on the basis of very strong uh Agriculture and and and certainly we can increase productivity in agriculture but we can also uh add value there um we also will for a while benefit from people looking at alternatives to China for the China plus one strategy perhaps for geost strategic reasons perhaps for diversification reasons so people will come by all means we should not abandon manufacturing but I would think if we want to put eggs in any basket we should be thinking more of the service component of manufacturing or Services more directly now let me let me pause a second and just say why was manufacturing so important in a country's development earlier well for sure it could take people from agriculture more directly in some of this low-skilled work but also export light growth gave a poor country access to global demand once you had access to global demand you could also have scale once you had have scale even with moderately skilled Workforce you could have higher productivity you could compete with industrial country firms and that could increase incomes locally and you could be on a virtuous cycle upwards so manufacturing became the ladder uh to to income growth and overall growth the problem is that ladder is not so effective anymore apart from the fact that now the labor component is much smaller labor Arbitrage has already taken place we're not competing with the workers in the United States we're not comp competing with the workers in the in the United Kingdom we're competing with workers in Vietnam who are really cheap and really productive and have that kind of tariff and uh and um logistic support that we could get but uh but it's going to be really competitive and so the value we're competing for has been pushed down the place where competition still hasn't gotten as much hold where there is some value we can capture is certainly on the services side talking to an entrepreneur from Bangalore he he he made a comment which you know sounds a little crude but seems really um you know to capture the idea do we want to be the Surfs of the global production process or do we want to be the Lords of the production process if you want to be the Lords capture the place where the Lords are adding value if you want to be the Surfs focus on low skill manufacturing as a way to grow and that's going to take a long time so why not choose an alternative path and just again I told you about the Apple iPhone think about the quintessential manufactured product the car the Chevy Volt which uh is gmm's sort of EV uh in 2010 programming accounted for 40% of its value the rest was all the parts and so on so so if we want to be part of a global supply chain if we don't have the logistics to match everybody else but we have a great digital infrastructure why not be part of the programming part of that value chain and we are we are except you know that is the hidden Revolution that's going on in India today we are getting to be part of global value chains that's why service exports are booming because we are insinuating ourselves into those parts through various kinds of uh of uh manufacturing uh various kinds of firms but with the what happened during the pandemic and as you heard in the previous panel we can also export a variety of new Services which could not be traded earlier think of T medicine think of Consulting you know my friend here is going to India to start up a process of you know hire a lot of uh of people of professionals and I said you're going to she's a Consulting she she she's a senior partner consulting firm I said you're going to get a back office she said no no the days of back office are gone this is actually a semi front office those guys are going to make presentations to our clients here those guys are going to do the work and all I mean we get some of the business here we're going to work with them but it's no longer the case that they're going to do the Powerpoints that we present here and I think more and more of services are going to go like that tick tick tele medicine right it's this is a win-win situation if we can get the right structures there is a shortage of doctors in the National Health scheme in in the UK long waiting lists and this will grow worse with aging because it's going to be harder to find professional doctors trained in this country it's true of the whole of Europe more than 40% of the doctors in Ireland or Norway are foreign and so they will need professionals from the rest of the world now you could import all of them by allowing tremendous levels of immigration or you could do services at a distance which you know allows India to benefit from those doctors because they have a local practice but allows them to export to the UK through tele medicine so tele medicine would be great but we need to try and make some changes to make that possible for example the NHS has to be able to pay Indian doctors for the services at a distance there to be a way of guaranteeing the quality of services there has to be mutual recognition of qualifications Indian uh you know uh medical degrees given by strong institutions uh should be recognized so Services can be exported today when they couldn't also services are much less dependent on scale than manufacturing it doesn't just need to be export-led Man U Services it can also be domestic related Services we have a huge need for Education we have a huge need for health care the co pandemic uh reflected that we can grow a lot by even servicing our own demand not necessarily just the export demand and finally there are many things which have brought down the need for scale in Services you know one of the biggest explosions my friend Raman Nanda at Imperial tells me one of the biggest implosion uh explosion Services was because of cloud computing once you had cloud computing you didn't have to buy the hardware you you didn't have to buy the whole network in order to be able to sell products you just bought the cloud services and everything came with that right so again and again what we're seeing is the way to grow is changing the old large scale manufacturing Le growth for exports is just one possibility there are many other possibilities some of of which are much more attuned to India's RS right so one example of something uh we could do uh so let me just emphasize I'm not saying abandon the manufacturing bus you know try and catch it it left the station Long back try and catch it but in the process of running to catch it let's not forget the services bus is drawing up and the services bus is much easier for us to catch and it was also something that we risk missing it's a high valuee bus we can do it now now we have to recognize in all this that the biggest value in this new world is essentially from intellectual property embedded in products right and and what we have to think more and more is how can we create those products the those apps the platforms uh how can we create 5G for example that we can sell to the rest of the world now a lot of 5G is software the hard is a lot of it can be commoditized but 5G linking all that together is about software we have an advantage there we can create that but most important I would argue our biggest Advantage is our democracy would you trust 5G that is sold to you from an authoritarian neighbor or an authoritarian country no because you worry about the back doors that are built in you worry that they might spy on your citizens you worry they may be blackmailed you want a certain level of checks and balances on the other country to be able to start to trust the possibility of 5G being sold from there India is in a good position in fact we're doing some of this already there is an organization called mospi in I IIT Bangalore which sells ID such as we already created the AAR system sells aspects of the India stack to a number of other countries but it has a transparent governance structure it has open source software Etc all of which Inspire trust in the other country that we're not this is not a backd door way for us to take you over this is really about helping you and think about that magnified many times over when you're providing Consulting Services you need to convince the other place that you're not sort of getting backd door entry in their firms finding out what they're doing and then use that to either get an advantage or blackmail them for that you have to convince them that you are bound by the rule of law not just you your government is bound by the rule of law they can't look into your books H based on women fancy for that we need to strengthen our democracy our checks and balances our our um you know uh strong data Protection Law it's in our interest our economic interest to keep the government from prying because that will enable us to convince the rest of the world that the government is not going to pry into the work of our businesses that will help our businesses sell that will be an compar comparative advantage relative to Chinese and Vietnamese and Russian firms and that's something we should be thinking about I think there are other advantages we have when we think about Services we have a very strong technology base we have a good reputation for high quality services uh many of the people in this room uh when you think about doctors in many countries you think about Indians you talk about computer programmers you think about Indians talk about Consultants they think about Indians so we already have a reputation we don't have as much of a reputation in manufacturing but we have a reputation in Services let's build on it we have the English language which um our friends in this room their ancestors gave to us that's an advantage that enables us to communicate easily with the globe yes chat GPD Plus will eventually will help in instantaneous translation but better talk to somebody directly than through a machine so in that sense we have an advantage that others are getting but it takes time we overinvestment losing that Advantage because we are letting the quality of our universities erode we need to build on them to have First Rate universities across the world and most importantly and this I want to emphasize and then I'll end our independent Judiciary our liberal democracy these are critical advantages if we are to go down the service manufacturing service L growth path because this will enable us to earn the world's Trust it's intrinsically necessary I mean our you know we want democracy as Indians but we also want democracy to be able to convince the world that we can be trusted that we can be effective providers of these kinds of services and so I would argue that you know um as as far as we go we need to do our homework in strengthening our institutions in strengthening our democracy uh you've heard example of how you know there are lots of positives uh uh our democracy keeps surprising us with its resilience but we need to do more and and lastly I mean people often ask me you you keep saying this oh I hear you're not against manufacturing I thought you were uh you know you're you're basically saying let's let's sort of focus on the area we are stronger in where we have a comparative advantage rather than abandoned manufacturing I hear that but what does that mean in terms of resource allocation and I'll tell you what it means it means that we don't spend $10 billion subsidizing chip factories when in fact we could spend $1 billion on opening 100 top quality universities th000 top quality secondary schools or 10,000 primary schools we need to focus on human capital not build mod chips which are going to be it's going to take us 30 30 years to get to the 20 years to the frontier maybe 10 years if we're really optimistic but there's already a glutton chips chip manufacturing is not where the value is where the value is in chip design we already have a presence in chip design and if we produce 10,000 Engineers a year of high quality we can be a global presence in chip design so why not do that rather than pour money into a pocket of you know uh which is very deep and we don't know what the success will be from that China spent you know hundreds of billions of dollars in trying to get a chip industry there nowhere near the frontier last question and I'll stop after this don't we need chips to be secure and you hear this again and again we need manufacturing We There was talk of superpow we need manufacturing to be a super power first we don't need it if we don't make enemies of the industrial world so long as we're friendly with you know countries I make you United States is building enormous chip Factories at enormous expense to the government we can always buy chips there because there will be periodic gluts anyway but chips are available there's the market for chips moreover if we increase our capacity on chip design we will also be crucial in that supply chain so put differently and and I'm happy to discuss this a little more we need to create the scientists doctors lawyers engineers and firms that will give India many more Lords and fewer surfes in the global Arena and that makes more sense than aping other governments in subsidizing chip manufacturing and spending billions of dollars in something that's going to employ very few Indians and not really give us the security that we need as a resource tra country we need to spend much more cleverly so in some to end we need an Indian growth path that draws on the capabilities of all Indians and builds on our historic culture of Tolerance and respect for all you hear this term visha Guru thrown around and I think we can be that but not based on the ideas of the past yes we can respect our past but because we have a new vision of inclusive Green Local Le service-based growth and development and we persuade the world that it works by showing in fact that it works so we have homework to do we have to focus on every Indian getting act getting a chance at doing those high-skilled jobs and often all it takes is the right education Skilling healthare and finance and and we need we we need to do much more on this but we can do it and to improve delivery of these we need to remedy the mistakes of the past including the excessive centralization and the top down decision making which historically has inhibited our ability to deliver Public Services we need to make Public Services much more responsible to the people then we will get higher quality Public Public Services we require a learning responsive government and we need need to strengthen the institutions of democracy we need to offset the erosion that has been taking place in the last few years but I think that if we do this we can have a Manifesto for change which is different from what other countries are embracing in our 75th year of Independence I think India's best years are still ahead but we have a lot of work to do I hope we Embark in that work thank [Applause] you uh thank you Dr Rajan uh the mics are on you can be heard right so I uh we I'll just come to the audience just uh start with three questions I I'll come to the audience in a b sir um youran got tired for so long um to begin with thank you for that wonderful and enlightening presentation there is one aspect which is fairly recent and I was wondering of if there are any predictive models or any thesis uh that would kind of predict what will happen which is AI artificial intelligence and machine learning I have uh attended uh a presentation by a very celebrated do Doctor Who has demonstrated how machine learning tools uh have an accuracy of detecting cancer based on scans and tests that are sent to them which are in fact better than some doctors uh AI is going to take service jobs before anything else you know it's CA uh lawyers and in some case even journalists as we've been seeing uh you know you can't detect a reported by journalist than from AI I was wondering amongst econom s is there any model that predicts how that would work in this very fast changing uh technological world uh no uh people have uh obviously this is this is early days for the technology and and clearly as with any such technology there will be certain jobs that are easier to automate to replace the hope is that what this will do is uh be an add-on that is uh I mean the very crude version is Excel didn't replace uh replace some clerks who joted down stuff and added up columns but also was a way for people to you know uh do a lot of calculations very easily and therefore made their jobs easier and the hope is that what this will do is take out some routinized elements of jobs while leaving some uh other elements available now there is a lot of fear that this will go beyond that you know there's this notion that somehow creativity can be outsourced to chat gbt plus and the problem to some extent thus far is that uh first must remember that in a sense this is all correlations and because language has a rationale to it it it sort of picks up the ration in language but the sense that this is thinking for itself no it's just finding out what the correlations are in a in a way which is far beyond our imagination so that it does seem to some extent like thinking but because we can't sort of unwind how that happens at least for now we can't be completely sure how it actually works and so you can replace some routine stuff where you're sure that it's not going to go off track but this concept of Hallucination is it can go crazy if you leave it unchecked sure but also there are elements where it doesn't because it's not thinking it's not doing what decent people would do right it's breaking the rules and sometimes breaking the rules can be tremendously damaging to a company so do you really want to allow something which can break the rules in other words I think for a long while uh uh it probably is going to be available in a very controlled environment in which it's going to be more an add-on rather than replacement increasingly we will trust our knowledge of it enough that it becomes replacements for example for the first layer of customer service or translations or translations and so you know we will have to have people sort of move to higher levels of of activity and there will be a whole lot of people who will have to change jobs you know uh once you had the horse and carriage go away The Bu buggy uh the the you know Carriage driver had to had to change uh maybe they became a car driver so there will be disruption in society there will be disruption in a variety of services but almost surely you will have to have higher order education higher order skills to still add value and the people who get do that probably can add much more value because it's augmented or transformed by this kind of think of it as capital a machine you're augmented by the machine and so I think this just reinforces the need for us to focus on our human capital on focusing on more you know uh better education better creativity better debate that's ideas is going to be where the value remains I mean the some times there's this notion that oh yeah but you still have to put stuff together those manufacturing jobs will remain well those manufacturing jobs will also be ched out by by robots they already assembly has already been done by robots yeah so so in that sense I think we have no option but to go upscale but do you worry because you spoke about the intersection of politics and economics or the political economy and in politics the polarization that we see the world over and you know wealth inequality and even in income inequality got wealth inequality far far larger extent is at record highs ever since records have been kept in that environment while you know being a lite is a pejorative uh I I you know heard a podcast where the Lites weren't all together wrong it did take away jobs and while they did come back one generation had to lose a lot yeah for the subsequent so while a conflict in society wasn't as connected as it is today in the social media age in an age of record inequality in wealth in an age of polarization and conflict like we've never seen before that generation that is going to lose so that future Generations May gain do you worry how that may play out in in World politics and economics no for sure any kind so think of the extreme where a few Tech trillionaires on chat GPT Plus or variance of that and nobody else has a job is that a society that can sort of survive and the answer is no because the rest are not going to sit and protect the property rights of the few and say oh yeah we're going to send all our money to you and you own all the robots no worries there is going to be a huge press for redistribution right ideally what you'd want is the rest to be able to do something which is useful given now if all the work in the world is taken over by robots you know kan's thought about this when he was writing the economic prospects for our grandchilden and he said the real trouble will be for us to figure out of ways to enjoy ourselves you know how will we spend time when we don't have to do work anymore and so let's not rule out the possibility that this is a good thing that some of this work especially the Drudge work being taken away is a good thing we'll say why were we translating all those boring things before but creative translations there may still be room for that so in other words we may move up in work we may have more leisure time but this requires a restructuring of society otherwise we'll have a implosion or an explosion because a lot of people don't partake of these benefits so in other words we have to recreate Society at the same time time as we are recreating work that's always happened we just have to do it in a fast at a faster Pace if this happens as fast as it as it's supposed to happen but last point before we get off this I think there's always a lot of hype around technological development right you know that um 3 years ago no six years ago when I came back from India to the US I had to buy a car and I decided that for the first time in my life I would lease a car because I thought with all the hype around Auto Auto automatic driving cars were going to come that driverless cars were on the way and I'd be stuck with a patrol car which I had to drive so I wanted to lease it so I could give it back and buy that that uh you know fully uh driverless car when it came it's still probably another 6 7 10 years away right why because even though we've gotten to a high level in driverless cars we want really to reduce the possibility of error close to zero before we feel happy with driverless C so it's very controlled environments in which we allowing them but not on the roads so it's going to take some time I would think the same is true for chat GPT plus and its inroads in the rest of the world it will take you will see some easy easy places where it's is used but for it to replace a lot of work will take time we'll figure out how to use it along with workers my sense is if it reduces all our work a little bit but we find a way to redistribute the income even better we find the way to rri the income being being the operative part it requires political adjustment absolutely um this is my last question and I'll come to the audience uh because I may not get a chance to ask a question of uh an economist with their Eminence I'm a news professional I've been in news for over 30 years now and uh I feel that with you know the traditional Market philosophy and logic which I agree with that markets is best for Price Discovery for resource allocation and for providing a better product to the consumer I have found in the last 30 years news has had the opposite effect the more players they are the quality of news has gone down just the damaging aspects of it have outweighed the you know positive aspects and they have been positive aspects all I was wondering briefly have you given it any thought that is news a case of Market filling just like CNN has been getting a lot of um criticism for that Trump interview that they did two years ago which is only for ratings and not for any journalistic inquiry uh do you think there is a logic to uh the news model uh whether it's a subscriber driven model whether it is an ad driven model or is it an inevitable market failure so I you know I'm I'm a Optimist on this right uh if you look look at the turn of the 20th century uh the 19th to the 20th uh there was a huge amount of press in the US it was called the McKing press and it was exactly what we fear about all this lowquality uh news with a lot of error uh you know uh facts that weren't facts and so on and eventually sorted itself out you know there were tabloids or their version of tabloids which contained all the Sens sens ationalism with modest accuracy and then there was the New York Times or the Washington Post that emerged from that as this is where uh sort of things are checked of course they make errors also every so often but but the point is that uh the system eventually gets tired of not being able to tell especially when the level of noise gets to high level and then sources emerg say okay we actually are closer to the truth because we employed this that and something else and my sense is something like that will continue to emerge over time which sort of straightens out the need uh to you know tell uh good from bad and there may be some people who don't care there's some people who want those uh All The Sensational stuff of uh you know uh modest accuracy while the uh some people really want to know that what they reading has been checked at least once even if they're not sure it's true clearly an optimist so I'll come to the audience uh I just have one request uh please keep your on questions short and please make sure it is a question so we can take as many as possible uh you know because there are a lot of hands up and I would like to come to as many people as possible if it goes too long I may be a little impolite and cut in and I hope I don't have to do that so let's start with the lady there and then I'll come to the gentleman there uh so we'll get a mic here we'll go to the gentleman there at the back after that and then to the lady here yeah these are the first three and I repeat if you could keep your question as short as possible and that it is a question okay uh thank you for um such an informative and insightful session how do we distribute growth across India to narrow the inequalities thank you yeah um you can take the question okay um look uh I think this is a big big question right and and I think it's very important and and so I think we need to focus far more on how we create uh good public goods Education Health Care um you know access to to opportunity um we have some examples of of it you know I think the uh AAP government in in Delhi has focused a lot on improving the quality of the schools and uh obviously one has to you know verify and monitor that process but they've seen that as job one and we need to do that more across the country the um Tamil NAD government which I I work with uh took as one of its important challenges how to bring kids back to school uh after the pandemic in a way that the uh sort of uh they they landed uh smoothly into their their cours work and so on and it they they created a whole new program to do that so uh we need more uh sort of local engage engagement for that one of the problems that I constantly hop on is that many school systems in India are governed at the state level when in fact uh the experience is at the local pchat or the district level could we sort of decentralize more of the governance so that parents uh uh villages have uh more control over you know the quality of the teaching if the uh you know School Master doesn't show up uh can uh they have more direct effect rather than having to go complain at the state capital that this person is not showing up so I think decentralized governance can be a big factor in improving the quality of Public Services that we we get in India I think many more state governments are seeing this as important because you know if you have poor quality schools you have poor quality uh uh you know students emerging from that and in this day and age where degrees are very important they don't get access to the best colleges and it's it's it's not a great career path so uh we need to do more uh and we need to spend more I don't think spending is the most important need but it is not it's cannot be ignored that uh certainly on Healthcare certainly on on education uh the more we do the more our our our uh people will be capable of dealing with chap GP plus and surviving it the gentleman at the back yeah thank you Mr SRI uh Mr rram you're an inspiration and my senior from the same school so glad to meet you umps yeah deep isuru right everything that you speak is watched closely by the government U and the opposition so my question is on a little lighter note 10 years down the line do we see you as the next FM or the of the country any any chance you stepping into politics yeah yeah uh look uh are you already there no I no I'm not even uh I'm not going to take that question seriously I I I will say that really what I I'm engaged in why do I keep talking about India the lots of people want me to stop talking about India uh and the reason I talk about it is because I really feel that we are at a crossroad we do have choices to make make and if we make the right choices I I'm not bothered about India being a superpow that to me is not the point the point is going back to what the father of the nation wanted that you make every every Indian happy how do we do that that's that should be our focus and I I think we're at a crossroad where we have to choose and we can choose well uh uh the lady here yeah uh Mr Ain uh thank you so much for your talk uh just on the point you made about the growth path for India uh where do you see things like a Free Trade Agreement which the UK and India are currently negotiating where do you see a role of that is there enough two-way advantages in there absolutely but but this is where I say we have to spend far more time including in our presidency of the G20 which is almost done to think about uh how do we create Pathways for services uh exports now the UK 70 you know 70% of the economy is about Services uh can we think about how we facilitate Service uh exchange between India and the UK to focus the Free Trade Agreement primarily on agriculture and Manufacturing is missing the biggest part of the gains to trade from both countries the UK has tremendous capabilities in uh in uh knowledge production you know you have two great May three great universities you have uh uh tremendous Pres presence in BIO bioscience in uh in um certainly in artificial intelligence India could benefit and there could be tremendous gains from trade how do we you know starters I I see that we we making some uh some taking some steps forward Mutual recognition of degrees but we could do far more if we can do that I think uh yeah this would be a fantastic step forward um gentleman here yeah yeah uh thank you Raam so my question is on uh you talked about design uh thinking mindset and keeping that as a top top layer it's been ages like you know decades we have been in employment you know uh when you go to the schools if you ask any kid you they'll be want you know I want to be a software engineer I want be this it's more like mindset of thinking towards getting an employment rather than being an entrepreneur or being into the design thinking mindset uh my question is what should the policy makers do uh to get into the schools those schools the ground level schools to change that mindset for the kids to make it Future Ready two is um you know we see a lot between central and state governments you know there's no amable nature sometimes and you know that creates some fuzz and doesn't actually deliver the best for the kids in the schools so what should be these these policy makers between central and state government should do to make that change the mindset of the kids as a policy and to uh you know kind of work together to make it better for tomorrow so I I don't know that we know how to change mindsets uh but I would say uh you know creating a liberal atmosphere in the school uh allowing different voices different thoughts it's when you regiment the school and say this is what you must think this is how you must think and if you think outside this box you you know you will be punished that's when you when you get the uh sort of very narrow uh uncreative thinking right so allowing for more allowing for Rebellion uh allowing for different thinking sometimes that's the beginning of uh you know great out of the box thinking um Einstein wasn't a great student in his school uh but that's because he spent a lot of time just wondering about and thinking about other stuff so uh I think we need more liberal colleges I'm I'm not saying liberal arts but just liberal in the sense of allowing a more U open curriculum you can take a little bit of this and a little bit of that forcing people to think more and as they think more they come to the realization that all the thought was not invented elsewhere we can invent new thought ourselves that confidence that you don't have to be a prisoner of your past you don't have to be a prisoner of somebody else's present you can be your own I think how do we do that and that to my mind is to encourage debate encourage argument encourage freethinking and that also requires a change in public life today it's all about you hurt my sentiment so I'm going to be angry with you I'm going to sue you I'm going to put you in prison that's not the India that we need if we want to be an idea superpower we need to have open dialogue that's what we need to build on uh okay we need to wind up I'm just going to two more question I'm sorry I know there a lot more we'll just take one from the lady there and then we'll come to the gentleman here and then we can wind up I'm so sorry I know there Lots but I hope Dr Rajan can uh interact with some people during lunch thank you thank you so much Dr Rajan my question if I may is to bridge a little bit from the previous panel into your panel and also to look a little bit outside of India and uh hear your thoughts more about India's role particularly on the international financing system a month from now uh president maon is hosting a financing Summit to really address some of the major Global challenges that were referenced on the first panel I'd love to hear your thoughts particularly about India's role as a leader in leading the thinking around how this International System needs to change I mean fundamentally the current system is out ofd particularly the multilateral institutions and I would love to see much more leadership from India in this space about what the new system needs to look like and I'd love to hear your thoughts today about where we could be taking a greater role there thank you so given the time I mean we could spend a long time talking about uh what needs to be done on the climate front um let let me say quickly two things one yes uh I I like the uh idea in the previous panel we should be focusing on common aversions and clearly uh climate is a huge state it is India's perhaps India's most important threat because South Asia is going to be at the center of climate disruption uh you know all this talk about uh wet bulb days and so on uh it's going to be hard to live in some places in in South Asia but also our dependence on the monsoon uh rainfall volatility is going to increase and that's going to be problematic on either end so we need to do a lot it benefits us if there's much more climate action and we need to be participants in that I mean there is a lot value to India's position that you know we want the guys who put it out there but at the same time we can't sort of make that the the uh basis for inaction we need to push for Action because ultimately it's going to affect us so I I certainly think we need to emphasize that financing is a big part of what needs to happen and we need to think about creative ways of Finance plus subsidy so that there's an element of subsidy which which all allows us to do some of the global public goods aspect of this um and in a sense a payment for the fact that we're stopping way before we reach the levels that that industrial countries are at that said I would say that almost surely a large part of the investment in South Asia and subs Southern Africa given the pace at which we're going on mitigation will have to be on adaptation not mitigation and the world is World wants the rest of the world to mitigate yeah because it helps everybody else but our more immediate concern is we're going to blow through the 1.5° we're going to have much more Terrible Weather situations we need to invest in adaptation because otherwise we're toast if we neither do mitigation nor adaptation almost surely we'll have migration and migration is something uncontrolled migration is something the industrial world does not work so it is Crisis time India has to take a a role it has to keep saying look we didn't do it but it also has to say how do we how do we sort of participate in the new design and and and that design has to have elements of both mitigation and adaptation right uh last one quick question and a quick answer because we are running behind schedule yes uh on your suggestion that democracy is not just an ideal in itself but it's something India could monetize through winning credibility for services is this an idea that uh is finding some sort of actionable awareness in the Indian government uh look I I I I do think so I do think it has intrinsic Merit but I'm trying to get people to see that it has value for India's future because there are some people who put more value on the the econ iic future than on the intrinsic merits of democracy um is it getting bite I don't know I I don't want to answer that it's probably something I should uh I should leave for debate but it's a good thesis I enjoyed it very much uh it was a original thought but thank you so much Dr Rajan it has been a privilege and a pleasure talking to you thank you for being a wonderful audience

Channel: newslaundry

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Id: PUDaHgHC8ao

Length: 59min 28sec (3568 seconds)

Published: Sun Jun 18 2023