India’s semiconductor chip race will destroy India: Raghuram Rajan’s Warning

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Raghuram Rajan
Raghuram Rajan

INVC NEWS
Mumbai  : The work of building four semiconductor units has started in the country. Electronics Department Minister Ashwini Vaishnav says that in the next five years, India will be included in the list of top 5 semiconductor chip manufacturing countries in the world. But former RBI Governor Raghuram Rajan says that India should not join the race to make semiconductor chips. By doing this he will be ruined.

Raghuram Rajan said that there are many other tasks more important for India than making semiconductor chips. Instead of focusing on this high-profile project, our education system should be reformed. Finance professor Raghuram Rajan said in a note at an event at the University of Chicago that the Indian government is giving more money as subsidy for chip manufacturing than the annual budget of higher education. that is not good. Certainly this is not the way to become a developed country. Rajan, who has been a staunch opponent of the policies of the Modi government, made it clear that his point does not mean that India should never make semiconductor chips.

Raghuram Rajan said that but today every country is doing the same. Getting into this race means ruining yourself. India had approved three semiconductor plants last month. There will be a total investment of Rs 1.26 lakh crore on these, in which a subsidy of Rs 48,000 crore will be given by the government. Rajan said in his note that chip subsidy is actually capital subsidy. This means it will be paid up front, not based on production. The government is claiming that the production of chips will start soon.

Raghuram Rajan said that if this claim is true then capital subsidy will have to be done quickly. But only a novice would believe that the subsidy will end here. If all goes well then we will get 28 nm chips. Today modern cell phones use a 3nm chip. If we want to become a global chip manufacturer in the frontier, we will have to subsidize some factories to reach that level. The reason for this is that more modern manufacturing technology is used in making modern chips which will be more expensive.

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