Union Minister for Railways, Communications, and Electronics and Information Technology Ashwini Vaishnaw on Friday hit out at former Reserve Bank of India (RBI) Governor Raghuram G. Rajan for expressing scepticism over the outcome of the government’s Production-Linked Incentive (PLI) scheme for semiconductor manufacturing.
“What Raghuram Rajan was before 2014, and what he became after that — when he was the Governor [of the RBI] — we are well aware,” Mr. Vaishnaw said, responding to a question at a BJP press conference on a recent paper co-authored by the economist.
“When [Mr. Rajan] criticised mobile manufacturing in India, I felt, if a person can go to Chicago, go through a good university education, and is still not able to grasp this issue, what is he worth? There are 25 lakh jobs in electronics manufacturing in India; each factory is such that in one place, 20,000 people are working. This is such a big change; every month, there is some big firm or the other talking of beginning manufacturing in India, such as Cisco,” he added.
Mr. Vaishnaw was reacting to a paper by Mr. Rajan and two other economists, which argued that India’s semiconductor manufacturing ambitions had essentially made it a net importer, and that the fundamental problem of indigenising supply chains was not being accomplished.
“When we correct for that, it is hard to maintain that net exports [of smartphones] has gone up,” Mr. Rajan, Rahul Chawla and Rohit Lamba wrote in the note.
Taking to his social media handle, Mr. Rajan said more than manufacturing India was merely an assembling platform for mobile manufacturers. “One key deficiency of the scheme is that the subsidy is paid only for finishing the phone in India, not on how much value is added by manufacturing in India,” he said.
In February, Mr. Vaishnaw accused the economist of changing his views on India’s semiconductor ambitions since 2014.
