Identify & resolve binding constraints to competitiveness in a time bound manner: Vijay Kelkar

KNN India, July 15, 2021

There is a need to identify and resolve binding constraints to competitiveness in a time bound manner, said Dr. Vijay Kelkar, Former Finance Secretary and Chairman of the 13th Finance Commission of India.

He was speaking at an online panel discussion on the issue of “Improving India’s Competitiveness for Inclusive Economic Growth”, co-organised by CUTS International and Pune International Centre.

On this occasion, Dr. Kelkar launched a White Paper prepared by CUTS International on the issue of Improving India’s Competitiveness for Inclusive Economic Growth (available here), and delivered the opening remarks.

He emphasised on the need of doing things right and quickly, particularly on the economic front, considering increasing threat at the northern border, and highlighted the need to take credible steps on decarbonisation and strengthening social harmony.

Pradeep S. Mehta, Secretary General, CUTS International, while presenting the White Paper, highlighted key pillars to improve competitiveness of Indian industries.

These are: investment in human capital, enabling firm level cooperation and participation in supply chains, ensuring fair competition, fostering convergence between trade, industrial and competition policies, and implementing cooperative federalism in letter and spirit.

Dr. Harsha Vardhan Singh, former DDG, WTO, pointed out that often, it is not the lack of knowledge about good policies, but absence of understanding of the mechanisms needed to implement such policies efficiently and effectively.

He highlighted the need to institutionalise high level coordination mechanisms within the government to address implementation challenges, and ensure periodic monitoring and review of such mechanisms.

Dr. Ajay Shah, Research Professor, Jindal Global University, emphasised that bad drafting of laws and regulations in India is the source of bad implementation.

He pointed out that we the people are principals and the state is the agent and the relationship is not the other way round.

“Government officers often have arbitrary powers and discretion which is misused. There is a need to achieve precision in articulation of laws, designing targeted objectives, and granting narrow investigative powers,” Dr. Shah asserted.

Dr. Ajit Ranade, Chief Economist, Aditya Birla Group, highlighted the need to double manufacturing exports for achieving the ambitious target of 10 per cent growth rate.

For this, Dr. Ranade emphasized on remaining committed to openness, focusing on human capital and skilling, enhancing India’s labour productivity, and adoption of National Competition Policy, would be the keys.

Puja Mehra, Economic Journalist, highlighted the need to arrive at political consensus on economic policies related to trade and competitiveness.

”There are several instances of reversal of trade liberalisation in terms of tariffs, which indicate that politics no longer believe in competitiveness,” she added.

Dr. Nagesh Kumar, Director, Institute for Studies in Industrial Development, emphasised on the need for India to join Regional Comprehensive Economic Partnership (RCEP). This would lead to efficient structuring of industries, including adoption of economies of scale and scope, and enhancing competitiveness.

When asked, Dr. Ranade supported the views expressed by Dr Kumar on joining RCEP

Bipul Chatterjee, Executive Director, CUTS International, in his closing remarks, lauded, and emphasised the need to continue, a solution driven discourse on existing problems in India’s path of improving its competitiveness for enabling inclusive growth.

“We will continue to advocate with the governments, both union and state, on the crucial need to address problems and devise solutions”, said Chatterjee.

”This will be the best way to come out of the economic depression due to the pandemic,” he added.

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