Raghuram Rajan has become a politician: Union Minister Ashwini Vaishnaw

Union Minister Ashwini Vaishnaw slammed the former Reserve Bank of India (RBI) governor Raghuram Rajan and referred to him as a politician who is “doing shadow-boxing on somebody’s behalf.” Vaishnaw’s comment was in response to a question on the latter’s charge that India is just assembling mobile phones under the Production Linked Incentive (PLI) plan and not manufacturing them.

The Union Minister said, “When good economists become politicians, they lose their economic sense. Raghuram Rajan has become a politician. Now, he should come out in the open, fight elections, conduct elections and participate in political activities. Doing shadow-boxing is not good. He is trying to do shadow-boxing on behalf of somebody else.”

Ashwini Vaishnaw also shared that the country is set to add more than 30% value to its electronics production sector over the next two years. Furthermore, he also added that the three businesses would soon produce crucial components for mobile phones for the entire world.

The minister stressed that each country that has begun producing electronics has followed the same process of bringing Completely Knocked-Down (CKD) components, Semi Knocked-Down (SKD), and integrating the final product. The development of various components takes place first after which systems are produced.

He shared that the current global supply chain is so complicated that no country can assert to have a value addition of more than 40%. He maintained that the maximum value addition that any country can claim for its electronics industry is 40%, and India is expected to achieve a value addition of 30% or more in less than two years.

Talking about the former RBI Governor, the minister said, “So, this kind of shadow-boxing Raghuram Rajan is doing is not a fair thing. He is a very well-accomplished economist. I request him to stay as an economist or turn into a politician.”

In a recent interview, Raghuram Rajan criticised Government’s Production Linked Incentive (PLI) scheme and said it is mostly about assembly and not deep manufacturing.

The PLI scheme for mobile phones was notified on April 1, 2020. The scheme extends an incentive of 4 to 6 per cent on incremental sales (over the base year) of mobile phones that are manufactured in India to eligible companies, for a period of five years.