Hyderabad

Former Reserve Bank Governor C Rangarajan on Friday said that certain economic policies of US President Donald Trump not only brought global economic trends to a standstill but were also self-destructive for the North American nation.

Addressing the 15th Convocation of Icfai Foundation for Higher Education here, Rangarajan, without naming BRICS, said the emergence of different blocks of countries within which trade is freer is inevitable, but the ultimate goal must be one large world with freer trade.

"The world today is in flux. The pursuit of certain economic policies by President Trump has brought world trade to a standstill. Hopefully, good sense will prevail and the policy makers in the US will realise the policies they want to pursue are self-destructive. India is the worst hit," the former Chairman of Prime Minister’s Economic Advisory Council said.

According to him, India's growth is uneven as six states- Maharashtra, Tamil Nadu, Karnataka, Uttar Pradesh, Gujarat, and West Bengal contribute 52 per cent of the national income while the rest contribute the balance of 48 per cent.

And for example, Goa's per capita income is 10 times higher than that of Bihar, he said.

The required nominal growth rate to reach the per capita income of USD 18,000 by various states (to make India a developed nation) is revealing, Rangarajan said.

Among the major states, the required nominal growth rate is as low as 8.71 per cent for Tamil Nadu, 9.63 per cent for Gujarat, 8.77 (per cent) for Karnataka, and 9.53 (per cent) for Maharashtra At the other end, the required nominal growth rate is as high as 17.4 per cent for Bihar, and 14.5 per cent for Uttar Pradesh, the former RBI chief said.

Rangarajan further said the vision of Viksit Bharat is not just a statistical goal – it has to be a transformative journey that requires the collective effort of government and society.

He opined that five focused areas-increasing the investment rate by two percentage points to support higher growth, absorbing new technologies to remain competitive, focusing on relatively labour-intensive sectors to provide employment and expanding social infrastructure such as health and education to ensure social justice must form part of the strategy of development, are essential to achieve the goal of Viksit Bharat.

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Though one need not belittle the achievements in Indian higher education, there is an inescapable need to strengthen the sector in terms of quality and effectiveness, Rangarajan added.