India Attracting New Forms Of Business And Should Capitalise On It, Says Raghuram Rajan

India is attracting new forms of business and should capitalise on it, according to former RBI Governor Raghuram Rajan.

International companies are looking for workers, but not in the traditional areas that we think of, Rajan told NDTV.com ahead of the launch of his book, Breaking The Mould.

They are hiring consultants to provide services to clients in the rest of the world, rather than creating low-skill manufacturing, chip designers to design chips for manufacturing elsewhere, he said.

"Let's drop the idea that we need to build up from the lower end to the upper end." If we create the minds that can design chips directly, we might not need to set up chip manufacturing plants and they will come automatically, he said.

"Our strengths today, lies more in the realms of brains rather brawns," Rajan said. But we need to generate those brains all across, he said.

According to Rajan, labour arbitrage in India is much easier. For instance, a consultant in India is one fourth the cost of a consultant in the west, he said.

Malnutrition needs to be brought down across the country, Rajan said.