India Inc. Needs To Respond To Various Reforms Undertaken: Chief Economic Adviser
India has used the Covid-19 crisis to unleash second-generation reforms focused on factor markets, Krishnamurthy Subramanian says.
India Inc. needs to respond to the various economic reforms that the Narendra Modi government has brought about to accelerate GDP growth impacted by the Covid-19 pandemic, Chief Economic Adviser Krishnamurthy Subramanian said on Friday.
According to him, India is the only country that has utilised the opportunity provided by the pandemic-induced crisis “to unleash the second-generation reforms focused on factor markets”.
“If you look at the reforms that have happened since 1991, most of those reforms were primarily focused on product markets, including the reforms that were launched by the Atal Bihari Vajpayee government as well,” Subramanian said at an event called by the Federation of Indian Chambers of Commerce & Industry. “But now, when you look at the reforms that have been launched, together with some of the previous ones, like IBC (Insolvency and Bankruptcy Code), (they are) basically an attempt to reform the capital.”
IBC is followed by labour reforms, the chief economic adviser said, adding that the cost of labour is an important factor of production. Agriculture, which is another important factor, is part of the primary sector, he said. “So, when you take these into account, there is a very important theme of Aatmanirbhar Bharat, which is primarily about relying on the private sector enterprise and on the efficiency that it brings.”
Subramanian said these reforms signal that the intent of this government is to rely on markets and that efficiency is primarily brought in by the private sector. "Now India Inc. actually needs to respond. We've enabled labour laws reforms, etc... There are enough and more opportunities for ethical wealth creation to be done in Indian context... This is something that I would like widespread in India Inc.," he said.
Observing that the idea of Aatmanirbhar Bharat is not anathema to competition, he said self-reliance can never happen without adequate capabilities. Capabilities are never built in a vacuum but they are built only by competing with the best, he added.