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India needs sector and location specific growth initiatives to enhance competitiveness: Report.
Aug 31, 2022
India needs a set of sector- and location-specific growth initiatives to reframe some of its key industrial and regional policies to pursue a coherent strategy for growth and competitiveness upgrading, a report said on Tuesday.
It said that India's headline GDP growth has been strong and even accelerating but weak social progress, rising inequality and a lack of convergence across regions suggest that this growth has failed to translate into the expected improvements in quality of life for many Indians.
The report titled 'The Competitiveness Roadmap for India@100' is jointly published by the Economic Advisory Council to the Prime Minister (EAC-PM) and the Institute for Competitiveness. It was released by EAC-PM Chairman Bibek Debroy.
The road map is a collaborative endeavour between the EAC-PM and The Institute for Competitiveness and is developed by Amit Kapoor, Chair, Institute for Competitiveness, Professor Michael E Porter and Christian Ketels of Harvard Business School.
'India needs to launch a new set of sector- and location-specific growth initiatives to reframe some of its key industrial and regional policies.
'Sector- and location-specific initiatives can identify the specific needs of individual clusters and regions and then select from generic policy tools to pursue a coherent strategy for growth and competitiveness upgrading,' it suggested.
The report also suggested that India needs enabling social policies that enhance the employability of labour market entrants and reduce barriers for job seekers.
These policies will address urgent social needs across the country and trigger job creation opportunities, it said.
While noting that India needs to make strengthening effective market competition a more central element of its efforts to upgrade business environment, the report said, 'deeply distorted market structures across many sectors currently lead to poor outcomes, undoing the significant gains made in factor input conditions'.
The report observed that regulatory frameworks that are unfit for purpose and legacy market structures reminiscent of different times are holding India back.
It suggested that India needs to adopt a comprehensive approach towards enabling the growth of competitive firms.
Noting that India's government has pursued an ambitious agenda of economic reforms, largely focused on the relevant issues and based on mostly sound conceptual principles, the report said, 'but the impact on job creation, terms of job creation and the growth of firms has fallen short of ambitions'.
While India performs surprisingly well in more sophisticated dimensions of competitiveness, it said, but the country still lags in key fundamentals, in particular skills, some dimensions of infrastructure, and the costs of doing business.
'The pandemic has pushed millions back into poverty, at least for now,' the report said, adding that social progress is lagging behind average prosperity, with dramatic weaknesses in environmental quality and the quality of basic education.
economictimes.indiatimes.com
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