Key Points

In his address at the CII Annual Business Summit here, Bery said that raising labour productivity would result in higher value addition by leveraging unutilised capacity and increasing labour activity. This would help increase incomes, raise the standard of living of the country, and help harness the potential of unmatched demographics, as well as exploit the technological and geopolitical advantage in the country.

He lamented that labour productivity in India is not improving at the desired pace, in line with the rise in aspirations. According to Bery, while the size of the Indian economy is half that of the US in purchasing power parity terms, the size of the labour force is three times that of the US.

The aim should be to leverage our labour force to take the economy to higher levels of growth, to generate better jobs. He mentioned that the problem of stagnation in productivity is faced by countries such as the UK and Canada. While productivity is rising in India, it is lower than in China and the ASEAN.

Bery averred that the productivity trajectory can be carved out into two parts. The first would pertain to a shift of population out of agriculture, and secondly, its transition to industry and services. This would not only improve the productivity of agriculture but would also raise output in industry. This transition is slower in India, and NITI Aayog is working on remedial actions.

Industrialisation is another challenge facing the country, and policy lessons could be drawn from countries such as China, Japan and South Korea, even though each country must work out its own path and productivity trajectory, Bery further stated.

"India should adopt a blend of Atmanirbharta and global engagement to stay competitive. We should focus more on India’s small and medium industries in line with countries like Germany. Indian industry has successfully navigated through the 1991 reforms and has acquired the confidence to effectively compete with the best in the world," he stated.

Bery mentioned that forging FTAs with trading partners, making forays in high-value sectors and diversifying our sources of supply is crucial to stay ahead. Competitiveness should not only be restricted to manufacturing but should extend to services as well.

Bery was of the view that institutions such as NITI Aayog also had a critical role in involving the states in the Viksit Bharat journey, and this pertains to all states and not just a few of them.

- IANS