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News: Recently, Cuts International, Institute for Competitiveness and Institute for Studies in Industrial Development published a white paper on ‘Improving India’s Competitiveness for Inclusive Economic Growth’. It discussed some of the pillars for improving and sustaining India’s competitiveness.
What are the economic reforms discussed?
It includes digital growth, trade policy reforms and a mix of inward and outward looking measures.
The economic reforms can help in fulfilling the agenda of alleviating poverty and creating better jobs.
What are the issues?
There is an inherent lack of cohesion between various ministries, departments and agencies working towards competitiveness. For example, the ministry of commerce and industry has two departments, both entrusted for different aspects.
The National Manufacturing Competitiveness Council could not make any impact.
What are the pillars for improving India’s competitiveness for inclusive economic growth?
There is a need for a ‘whole of government’ approach, within the Centre, and with and among states.
A robust institutional structure is essential for achieving business competitiveness, capacity building, supply chain resilience and negotiating free trade agreements (FTAs).
There is a need for a law and an institution which can persuade all organizations to pursue competitiveness. It requires policy convergence of both inward and outward looking policies through an overarching legislation with a supervisory body. India can take a cue from the US Competes Act, an umbrella legislation that covers all US policies aimed for global economic leadership.
Other key areas include information and communication technology (ICT), 6G technology.
Exports of goods and services depend on robust domestic linkages and production capacity.
There is a need for strengthening of trade linkages and our industrial base to limit inverted duty structures.
Action is also needed on non-tariff factors: incentivize innovation, strengthen the intellectual property regime, reduce logistical costs and ease the running of a business.
India must also leverage advanced technologies such as 6G, Internet of Things and blockchain.
Way Forward
A National Competitiveness Commission under a new law would provide a robust forum for policy dialogue. It would also ensure proper policy implementation in India.
India’s priorities are competitiveness enhancement, self-reliance and exports-led growth. The administrative reforms act as enablers.
The idea of competitiveness-focused legislation needs to be floated and acted upon. It would enable India to carve out a position for itself on the global stage.
In India, the Centre announced a ₹76,000 crore package for semiconductors by way of its production linked incentive (PLI) scheme.
India is trying to boost its manufacturing capacity through Atmanirbhar Bharat and Make in India. India can strengthen its global forward and backward linkages through the supply chain resilience initiative (SCR) and collaboration with other ASEAN countries in the Indo-Pacific region.
India’s department of telecom (DoT) has constituted six task forces on 6G Technology.
The MEA’s New, emerging and strategic technologies (NEST) division promotes national interests and ensures India’s active participation in international forums on technology governance.
The multiple ministries and departments involved in various functional aspects should talk to each other in a meaningful way.
Source: The post is based on an article “Is it time for India to go for competitiveness legislation” published in the Live Mint on 01st June 2022.
