RBI governor Raghuram Rajan has come up with his master plan to bridge the caste gap in the country by stating that enabling Dalits to start businesses will be a more effective step in bringing about social equality than any other affirmative action.
This opinion of Rajan is backed by the logic that money empowers than many other forms of affirmative action.
Rajan further added that rather than prohibiting the use of money and wealth, let us think about increasing society’s tolerance for its use, he said, addressing the convocation ceremony of Shiv Nadar University in Greater Noida.
Rajan also cautioned against the growing inequalities in the country. He emphasised on the role of education and health care to restore faith in markets in these circumstances.
Taking a difference stance on tolerance in the society the RBI Governor said that money is a great equaliser and took took on the criticism of money by US political scientist Michael Sandel in his book What Money Can’t Buy: the Moral Limits of the Market.
Rajan pointed out that the income inequality is on the rise, with some having colossal incomes and others worrying about the next meal.
In his address, “Money and Education”, the RBI governor attributed the growing inequalities partly to skills and capabilities that have become much more important in well-paid jobs. As such those born in good circumstances have a much better chance at acquiring these.
As a solution, he said, we have to work to provide effective access to schooling and health care for all, a non-discriminating job market with many jobs, equal opportunities for further advancement regardless of gender, race or background. All this will increase the perceived legitimacy of wealth and society’s willingness to broaden the areas where it is spent.
Thoughtful philanthropy can further help enhance society’s acceptance of great wealth, he said.
These observations of the RBI governor are noteworthy because it comes admist the International Monetary Fund’s warning to India and China, the two fastest growing large economies, about rising inequalities.
He also said India needs to have a more “contingent student loan system” which needs to differentiate between those who can repay their loans and those who cannot. Such a system would prevent an US-like education loan crisis in India, he added.
Rajan also pointed that unscrupulous schools do not prey on uninformed students, leaving them with high debt and useless degrees.
As on January 2016, the unpaid student debt could be as high as $1.2 according to reports.