New Delhi: Raghuram Rajan, former RBI Governor has urged India to focus on improving its services sector over expanding manufacturing for sustainable growth and job creation.

At the Annual World Bank Conference, Raghuram Rajan said that manufacturing is not the “holy grail” for India’s economic success. He explained that the manufacturing sector struggles with issues like limited export capacity and strong competition from countries such as China, Vietnam, Indonesia, and Mexico. He stated “Both politically and economically, the manufacturing ladder is harder to climb,”. (Also Read: Amazon India Staff Claim Harsh Working Conditions: Forced To Stand For Hours, Denied Restroom Breaks)

He further emphasised that services, and services integrated into manufacturing, offer more value than traditional manufacturing. “The significant value added is in the intellectual property within services, not in the actual manufacturing. We need to view services as the potential leading edge of the economy,” Rajan explained. (Also Read: Budget 2024: Key Details Unveiled! Find Out Date, Time, Where to Watch — All You Need To Know)

Rajan highlighted the importance of improving education and healthcare services in India. He mentioned that fostering innovation and creativity is essential for capturing high-value opportunities.

Job creation should be India’s top priority and it doesn’t just mean creating high-end positions. “The need of the hour is more jobs,” Rajan said, emphasising that both current and future employment opportunities are crucial. Raghuram Rajan also stressed the importance of creating jobs that align with current skills as well as investing in training programs for future opportunities.