Focus on upskilling workforce; move to higher value parts: Raghuram Rajan tells TN govt

CHENNAI: Opponents of labour migration from north to Tamil Nadu might do well to seriously reconsider their biases and embrace them if they seriously want their State securing the competitive edge and flourishing in the global business map. Seconding the opinion is none other than former RBI Governor and member of the Economic Advisory Council to Tamil Nadu Chief Minister Mr Raghuram Rajan, who argued that the State must focus on upskilling the workforce and move to higher value-added parts of business.

Speaking at the panel discussion on big bets for Tamil Nadu's trillion-dollar economy at GIM 2024 here, Raghuram Rajan said that Tamil Nadu must create a focus on its workforce and it was the capable workforce that would bring people (investors) here. Suggesting that it must be augmented with schemes like Naan Muthalvan to upskill the workforce, the former RBI Governor said that investors coming to the country do not find workers who are not adequately trained and that is where Tamil Nadu was different.

"We must focus on building that strength. Tamil Nadu must move to higher value-added parts because that is where your (TN) comparative advantage is going to be. Eventually, when those states (northern) get their act together, you may have then morph into higher value-added aspects in which you have built a base in. For now, you get migrants to do some of the other areas you are leaving behind. It must act like a continental economy. The faster-moving states (like TN) are going to go upstream and allow the slower-moving states to fill in the gaps through migration," Rajan suggested.

TN contemplating reforms like privatizing distribution: AS

Both Rajan and Arvind Subramaniam concurred that the discount debt of the state was a matter of concern.

While Raja proposed a focus on minimizing unnecessary expenditure, Arvind said that the discount losses of the state are very high and the Tamil Nadu government was committed to getting it back on track. Proposing a hike in tariff, the former CEA said that Tamil Nadu has started to take action on that and it was committed to institutional reform.

"Even in Discoms, it is not just tariff, but an institutional problem. TN is one of the three states where distribution and generation are in the same institutional setup. Many other states have got the private sector into distribution. These are some of the reforms the government is contemplating. The government has to decide on the timeline. They are seeing it seriously. It is a matter of macro-economic survival," he disclosed, exposing the incumbent government which has been playing hide and seek on the issue of divestment in the State power sector.

"India is too big to be run only from the Centre. The states are extremely important and you need to devolve more finances to the state and that is where most of the investment is going to take place, especially in infra. Steady devolution of funds and functions to the state that happened over time must continue," former RBI governor Raghuram Rajan said.