India may need a productivity commission, says NITI Aayog's Suman Bery

BS Manthan: Suman Bery suggests rebranding NITI Aayog as a 'Productivity Commission', stressing higher labour productivity and greater women's workforce participation to achieve Viksit Bharat

NITI Aayog Vice-Chairman Suman Bery on Tuesday suggested that the government’s policy think tank could consider rebranding itself as “Productivity Commission”, arguing that India’s demographic dividend must be supported by a strong and sustained push to improve productivity.

 

Speaking at a fireside chat titled ‘A path towards a modern India’ at BS Manthan, Business Standard’s flagship event held at Bharat Mandapam in New Delhi, Bery said the next 25 years will see the largest additions to India’s working-age population. This, he said, makes it essential to focus more sharply on improving labour productivity.

 

Rebranding NITI Aayog

 

Referring to global examples, Bery said, “Australia has something called a Productivity Commission, and the thought has gone through my mind that maybe we should rebrand it (NITI Aayog) as a productivity commission.” He clarified that this should not be seen as a formal proposal, but as an idea worth thinking about.

 

 

Bery said India’s demographic dividend and the goal of becoming 'Viksit Bharat' by 2047 are closely linked. Without improving productivity, the benefits of a young and growing workforce may not be fully realised, he said.

 

He pointed out that India’s labour productivity is not weak, but it is still much lower than China’s. To raise productivity, India will need to both increase labour force participation and ensure that new workers entering the labour market do not reduce the average output per worker.

 

Women’s workforce participation key

 

According to Bery, a major opportunity lies in increasing female labour force participation. Around 183 million women are currently part of the workforce, while about 264 million women of working age are not, he said, describing this gap as a “huge” opportunity for the country.

 

Mobilising this large reservoir of skilled women will require addressing social norms, childcare challenges, and other barriers that prevent women from working. At the same time, policies must ensure that bringing more women into the workforce does not lower overall productivity, he said.

 

Bery said data shows a near one-to-one link between labour productivity measured in purchasing power parity terms and real per capita income. If India wants to raise real per capita income to $18,000 by 2047, labour productivity will have to increase several times from the current level of around $3,000, he said.

 

Investment and urbanisation push

 

Bery said faster growth will require higher investment. As the working-age population grows, India must avoid “capital shallowing”, where capital per worker falls.

 

“Accelerating growth means bringing more people into the active labour force, and at the same time raising their average productivity," he said.

 

Bery estimated that India may need to increase its investment rate by two to three percentage points of GDP. Key areas driving capital demand include domestic investment, commitments towards energy transition and rapid urbanisation.

 

He also stressed the importance of exports. In a fast-growing economy, higher imports will need to be financed through strong export performance. However, gaining a larger share in global markets will require better competitiveness, especially if global trade growth remains slow, he said.

 

Services, skills and future strategy

 

On sectoral priorities, Bery suggested that India may need to rethink its traditional focus on manufacturing as the main source of jobs for unskilled workers. He said the services sector could provide significant opportunities if properly managed.

 

He also called for stronger apprenticeship programmes and lifelong learning under the National Education Policy. He cautioned against relying too heavily on higher education that is mainly aimed at securing government jobs.

 

On artificial intelligence (AI), Bery acknowledged uncertainty about its impact on productivity. Instead of making large bets on specific technologies, he said policymakers should adopt “no regret” strategies that would benefit the economy under different possible future scenarios.