NITI Aayog CEO BVR Subrahmanyam has called for more than a dozen reforms including lowering of trade tariffs and procedures and removing protectionism while freeing up the services sector of stringent regulations to enable India’s economic transformation.
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Speaking at Confederation of Indian Industry’s Annual Business Summit 2024, Subrahmanyam listed out the need for fundamental reforms in education and skilling to reap the benefits of its demographic dividend along with intervention to enhance the women labour force participation rate and plethora of policy measures in agriculture along with greater private sector investment in infrastructure and governance reforms.
“I think the primary and the most fundamental reform that is needed is in education and skilling. Without that the rest of it is a complete flop story,” he said on Friday.
“There are multiple ways of doing it. The government should just hand over skilling institutions to the private industry and actually ask them to run it while the government pays for it,” he suggested.
Commenting on a very low female labour force participation rate in India, Subrahmanyam said a plethora of interventions are needed to educate women, skill them, providing a safe environment for women to work and provide enough jobs and other related facilities. “This is fundamental. No economic transformation can happen without women entering the workforce in large numbers,” he said, adding a lot has to be done if India has to realise the potential of its Nari Shakti.
Observing that India is not part of the global value chains in any significant way, Subrahmanyam called for concerted effort in that direction. “To get into global value chains means a fundamental change in a lot of things. It means low tariffs, low procedures and no protectionism,” he said.
“I think we should go for very low tariffs when you should sign many more free trade agreements and try not to protect anybody or any sector so that we can actually be on par with the rest of the world,” he added.
Commenting on India’s advantage in the services sector, it is largely because of our manpower and good education system, particularly at the higher levels.
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However, we are not yet global players in education, healthcare or professional services. “I think we need to do more, which means not only loosening regulations but also allowing outsiders to come into the country so that we actually benchmark ourselves against the best and go out and open markets for ourselves outside,” he added.
Talking about agriculture, Subrahmanyam said it is a very important part of the economy because it acts as a sink, which absorbs a huge part of the population.
“I think agriculture requires a whole range of interventions so that actually India becomes a global agricultural power and the food basket of the world,” he said.
Recognizing the fast pace of infrastructure creation in India, he said much more needs to be done in terms of getting private capital into the sector.
“And last but not the least, it’s about government and bureaucracy. I think there is a need to change the way we function, our efficiencies, our structures, our processes, all of that needs to change,” he advocated.
Favourable circumstances
Listing out some of the circumstances that are actually working in India’s favor at this point in time, Subrahmanyam said, India is a diversified economy with presence in every sector and sub sector which is a massive strength.
“Second is our demography as we have a very youthful population which is going to be the engine of manpower which will drive the world’s growth in the next decade or two. That’s something for us to actually capitalize on,” he said.
According to Subrahmanym, geopolitics seem to be favoring India along with technological disruptions and the fact that India has a huge domestic market which allows its companies to grow in size and scale and become global players.
“India’s development model is a great success and is a role model for the entire global south. So if we make a success over the next 10-20 years there are many other countries in the world including in the global south, which will look up to India as a model,” he said.
Challenges
However, there are two big challenges domestically which India needs to handle, Subrahmanyam said.
“One is demography which can become our weakness if we do not utilize the population to our advantage. We need a population which is skilled which is capable of actually doing productive work, which can then lead to gainful employment and incomes,” he said.
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“The second thing is regional imbalances within the country. I think we need to ensure that different regions of the country actually grow at a similar pace which will require multiple transformations in terms of industry and demand,” he added.
