The Union Budget for FY25 presented by Finance Minister Nirmala Sitharaman on July 23 has sparked widespread discussion. While many focused on the welfare of the middle class, former RBI Governor Raghuram Rajan emphasized the importance of leveraging India’s demographic advantage. Speaking to Deutsche Welle, Rajan highlighted the need for India to grow rich before its young population ages, cautioning against wasting the demographic dividend and stressing the importance of strategic planning in an evolving global economy.
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- The Union Budget for FY25 was presented by Finance Minister Nirmala Sitharaman on July 23.
- Former RBI Governor Raghuram Rajan shared his views on the budget, focusing on India’s demographic advantage.
- Rajan spoke to German network Deutsche Welle, emphasizing the importance of using India’s young workforce effectively.
- India has one of the youngest populations in the world, with a median age of 28.3 years as of 2023.
- Rajan stressed that India needs to grow rich before its young population grows old.
- India’s fertility rate has dropped below the ideal replacement rate of 2.1, posing a challenge for future growth.
- The country lacks significant immigration, making it difficult to replace the aging population.
- Low labor force participation among the youth is a major issue, risking the demographic dividend.
- Automation, AI, and regional competition in Asia Pacific add to the challenges for India’s labor force.
- Rajan advised India to seek a different growth path, considering the wave of protectionism and the need to become a manufacturing powerhouse.
