Jobs, agri, women, and tech: NITI's Bery outlines 4-pronged growth plan

The vice chairman added that a major challenge in the way of this endeavour is that manufacturing is becoming increasingly capital intensive

Generating high-quality jobs, reforming agriculture, increasing women labour force participation, and harnessing technology, are the key issues India’s official policy think tank NITI Aayog is extensively grappling with to chart India’s growth story for the future, its Vice-Chairman (V-C) Suman Bery asserted at Business Standard Manthan on Friday.

 

“India is an agricultural tiger waiting to be unleashed. We are again stuck in, as it were, a model that saved us from hunger but which now needs to evolve. There’s already a lot of risk in agriculture, so I don't want to seem hard-hearted but I think that putting crop agriculture and horticulture on more or less an even path,” Bery said, in response to a query about the major challenges the country’s policymakers are seeking to tackle.

 

 

There’s a large agenda which will need to be undertaken in research and technology in terms of agriculture, he noted, adding that India’s increasingly young workforce poses another challenge.

 

“Getting a balance between what has been happening in higher education and meeting the aspirations of the people who have come out of our higher education system and providing them with jobs of the kind that they feel they are entitled to, even if they may not be, is a giant enterprise…  It's an enormous labour market with a very high degree of informality. And how you push all of this to a labour market system which encourages investment in training is an enormous challenge,” said Bery in a fireside chat.

 

The V-C of the Aayog added that a major challenge in the way of this endeavour is that manufacturing is becoming increasingly capital intensive. Moreover, female labour force participation will be a key driver of growth in the future, he said, adding that there has been progress in women's employment driven by the Prime Minister (PM) Narendra Modi.

 

“Higher productivity means you get the same output for fewer workers. But if your labour force is increasing, then the only way you can absorb them is to grow faster and to employ more people. And our most underutilised resource is women. Now, the PM has been on this from the very beginning and there has been progress on female labour force participation but that could be a huge kind of growth driver,” Bery said.

 

India will also have to ensure that it makes faster strides in technology, both through inward-looking interventions and engagements on foreign trade.

 

“For us to be at the technological frontier and to benefit from technology – a lot of which has to be embodied through foreign direct investment – is a very important dimension of our trade agreements,” Bery said. The Union Budget has signalled India’s willingness to look again at bilateral investment treaties, he pointed out.

 

Bery also highlighted that it is anybody’s guess whether higher tariffs levied by India in the past have helped the Indian economy. Lower tariffs could be one way of achieving 7 per cent and competitive growth for the economy, said Bery.

 

“It should not be the case that we do things only because it suits the US. We should use this pretext to do things that are in our interest,” Bery said. India has lowered tariffs on several items across sectors in the Budget, as well as subsequently, after US President Donald Trump announced a reciprocal tariff policy.

 

According to the veteran economist and academic, it is too early to tell whether there will be a global reset given current geopolitical developments, but mentioned that India would benefit from Russia being taken away from the Chinese embrace as the US re-establishes dialogue with it after the change of leadership in the US administration.

 

“The Europeans have been a little unrealistic. Russia is an important European power. And to, as it were, assume that it can be ostracised forever, I don't think it is realistic. I think that in a sense, re-establishing dialogue with Russia by the US is probably a good thing (for India),” he said.

 

The Aayog V-C said that because of recent developments, the European Union (EU) is looking to create options for itself, which is evidenced by the fact that there was a clear commitment to wrap up the free trade agreement by the end of this year in the declaration after Modi met with EU Commission President Ursula von der Leyen on Friday. Bery added that there was emphasis from the president on the fact that India is a valued and trusted partner.

 

On the overall impact of global developments on India, Bery said that India will have to be watchful of this uncertainty. “India, as the fifth largest, soon to be the third largest economy in the world, is very much impacted by global growth and global financial conditions: be it the dollar, be it US bond yields, etc. And so these indirect consequences of President Trump are as important for our policymakers to keep an eye on… because, amongst other things, increased uncertainty is bad for investment globally. And what the world needs because of the challenges of climate change and technology, is a big investment push. India needs a big investment push. And so, to clutter the landscape with a lot of arbitrariness is not good for the global economy,” Bery said.

 

The fiscal challenge of climate adaptation, coupled with growth objectives of the country, will need to be addressed going ahead, according to him.

 

“The fiscal challenge of financing adaptation while maintaining growth, and by adaptation I mean both chronic adaptation, heat stress, disasters, is trying to maintain a growth rate and having the fiscal means for this is a big challenge. On the energy transition side, financing is the big issue. Another issue is financing a big investment push. I think that while we're doing quite well in terms of our investment rate, if we want to grow at 7 per cent, it's going to need to be raised. And the question of where those resources are going to come from is partly a question of public finance, and partly a question of private finance,” Bery underlined.