Telangana CM Revanth Reddy felicitates Raghuram Rajan in Hyderabad

Telangana Chief Minister Revanth Reddy on Sunday felicitated former RBI Governor Raghuram Rajan, who is in India to promote his latest book - 'Breaking the Mould'. Reddy, who assumed power from KCR earlier this month, met with Rajan at his residence in Jubilee Hills. During the meeting, the chief minister and Rajan discussed the economic condition of Telangana and the strategies that needed to be adopted for the economic development of the state, the chief minister's office said in a post on X.

Reddy's meeting with Rajan evoked mixed reactions, with some hailing the chief minister for consulting renowned economists but others pointing to some of his not-so-accurate predictions about the economy and his stand on manufacturing in India. Rajan once suggested that India should not follow China's manufacturing model, which he said would be environmentally harmful.

After Reddy posted a video of his meeting with Rajan, Vikram Singh, a social media user, referred to the economist's take on manufacturing in India and looked not very impressed by the chief minister's move. "What a fall for Telangana. We consider guys who think Manufacturing should not be taken up in India as it's polluting the whole world," he said.

Rajan, who served as RBI Governor from 2013 to 2016 and is currently a Professor of Finance at the University of Chicago's Booth School of Business, has also published a paper on India's production-linked incentive (PLI) scheme. In the eight-page paper published in May this year, the economist said, despite paying heavy subsidies to big firms, the PLI scheme "does not appear to have worked so far".

However, some social media users hailed the Telangana chief minister for meeting Rajan. A social media user suggested Reddy appoint Rajan as an OSD (officer on special duty) in the state's finance department.

Rani Padma, another social media user, said Rajan is good at numbers, so CM Revanth Reddy must seek his services and put the wheels of Telangana into motion.

However, Krishnam Reddy, a research scholar in Chemical Biology, said the economy has its nuances in terms of the society where it is operating. "I would suggest @revanth_anumula Anna to discuss someone from Indian society rather than a media celebrity banker."

https://twitter.com/Krishnam39/status/1736299049140077011

The Centre has been pushing for more manufacturing in India. It has rolled out PLI schemes in many sectors to attract foreign players. However, Rajan has, on multiple occasions, said that the scheme has not achieved the intended results as most companies getting incentives under this programme are just assembling products, they are not doing any manufacturing in the country. He also argued that India's PLI scheme has not created enough jobs.

On Saturday, Rajan said India will remain a lower-middle country if the potential growth rate remains at 6 per cent annually without any rise in population by 2047. "India's growth potential is today about 6 per cent a year, GDP growth. If you do the math, at 6 per cent a year, you double every 12 years and therefore in 24 years, we'll be four times our per capita income. Today, the per capita income in India, as you know, is just a little below $2,500 per person. Multiply by four, we get $10,000 per person...So if you do the math, at our current rate of growth, you know, strong as it is highest in the G20, we don’t get rich but we stay lower middle income till 2047," he said while speaking at a programme organised by Manthan in Hyderabad.