Raghuram Rajan Calls for Job Market Boost Ahead of India’s Union Budget 2025

Davos: Former Reserve Bank of India (RBI) Governor Raghuram Rajan highlighted the urgent need to strengthen India’s job market, even as he lauded the Modi government for significant progress on infrastructure development. Speaking at the World Economic Forum’s Annual Meeting in Davos, Rajan expressed hope that the upcoming Union Budget would address the issue and spur job creation.

Infrastructure Progress Praised

Rajan acknowledged the Modi government’s achievements in improving infrastructure but emphasized that robust job creation is essential to boost consumption and overall economic growth. “India is growing at 6%, which is great, but when we look at per capita figures, it needs to grow much faster,” Rajan remarked.

Focus on Job Creation in Budget 2025

With the Union Budget just days away, Rajan expressed optimism about potential measures to support the job market. “Hopefully, we will see something concrete in the Budget to address employment challenges,” he said.

Rupee Depreciation and Dollar Strength

Rajan attributed the rupee’s depreciation to near ₹85 against the US dollar to the American currency’s strength, rather than domestic economic factors. “The depreciation is more about the dollar’s strength. Emerging market central banks are often forced to intervene, but the point is—it’s not their fault,” he explained.

BRICS Common Currency Unlikely

Addressing speculation about a common currency for BRICS nations, Rajan ruled out any immediate possibility, citing geopolitical tensions and diverse national priorities among member countries like India and China. “There are too many issues to sort out before such an initiative can take shape,” he added.

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Digital Currencies and Global Concerns

Rajan also weighed in on the debate over non-central bank digital currencies, highlighting concerns among emerging markets about their potential weaponization. He reiterated that the dominance of the US dollar depends heavily on global unity in the next 25 years.

Key Takeaways

• The Modi government’s infrastructure achievements received praise, but Rajan stressed the importance of job creation for economic stability.
• India’s Union Budget 2025 is anticipated to include measures to strengthen the job market.
• Rajan highlighted the role of the dollar’s strength in the rupee’s depreciation and dismissed immediate prospects of a BRICS common currency.
• He also addressed fears surrounding digital currencies and their implications for emerging markets.

Raghuram Rajan’s insights at Davos underscore the pressing need for policy measures to enhance India’s job market, while also addressing global economic trends that influence emerging economies. The upcoming Union Budget 2025 could play a pivotal role in setting the course for sustainable growth.