New Delhi: RBI Governor Raghuram Rajan on Friday cautioned against Prime Minister Narendra Modi’s pet project “Make-In-India” campaign saying that what worked in case of China may not work for India. He said that India should not focus only on manufacturing and suggested that export led growth as achieved by China and Asian countries may no longer be possible.
RBI governor favoured incentivisation of dome-stic savings to boost investments in the country. “The income tax benefits for an individual to save have been largely fixed in nominal terms till the recent budget, which means the real value of the benefits have eroded. Some budgetary incentives for household savings could help ensure that the country’s investment is largely financed from domestic savings,” Mr Rajan said. He said the domestic demand has to be financed responsibly and as far as possible through domestic savings.
On Make-In India campaign, RBI governor said that when India pushes manufacturing exports, it will have China to contend with. “I am cautioning against picking a particular sector such as manufacturing for encouragement, simply because it has worked well for China. India is different, and developing at a different time, and we should be agnostic about what will work,” Mr Rajan said at the Bharat Ram Memo-rial Lecture in Ficci. Mr Rajan pointed out that an export-led growth will not be as easy as it was for the Asian economies who took that path before India.
During independence day speech, PM Modi had invited global companies to make in India and export anywhere in the world. In recent times, government has been concern over falling share of manufacturing in India’s GDP and has been taking steps to promote manufacturing in the country.
