Mumbai Center Director Addresses Press Conference on the New Indian Government’s Agenda

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Mumbai Center Director Addresses Press Conference on the New Indian Government’s Agenda

May 27, 2014

Addressing a group of journalists, Nirupam Bajpai, director of Columbia Global Centers | South Asia, said India’s growth and development strategy needs to focus on one key requirement – to create large scale  job opportunities, year-on-year, across the country. India needs to create 16 million new jobs every year, a herculean task by any standards. Fifty percent of India’s population is below the age of 25 and more than 65 percent is estimated to be below the age of 35. It is expected that, in 2020, the average age of an Indian will be 29 years, compared to 37 for China and 48 for Japan.
 
Bajpai said large scale job opportunities can be created with a strategy that focuses on labor-intensive manufacturing production. And similarly, there is enormous potential to create new jobs with a strategy that focuses of an agro-based industrialization in the rural areas. Additionally, he added, the indirect jobs these strategies will create because of the multiplier effect for every new job in the manufacturing sector, there will be three new jobs created in the service sector.
 
However, in order for the above to be achieved, Bajpai said numerous policy and institutional reforms will need to be implemented for India to become a major platform for manufacturing production, including an overhaul of India’s current Special Economic Zone (SEZ) policy and framework.
 
In a broad sense, he said, growth strategies for large landlocked and laggard states, such as Uttar Pradesh, Madhya Pradesh, Bihar, Rajasthan, Assam and the other north-eastern states, an agriculture-led growth strategy is called for (with an urgent need to bring about a Second Green Revolution in these states) along with a major push to help set up agro-based industries.
 
For coastal states, such as Gujarat, Maharashtra, Tamil Nadu, Andhra Pradesh and Karnataka, a strategy that focuses on vigorously promoting labor-intensive manufacturing, both for the domestic market as well as exports is called for, he added.
 
India’s landlocked and laggard states essentially require an agriculture-led growth strategy said Dr. Bajpai. Hence, the development strategy for them should focus along the following lines:

Agriculture-led growth as the main area of focus; under which, some of the key objectives should be

  • Productivity improvements, including agricultural extension, research and development, and crop diversification. Higher agricultural productivity is a key factor in rural poverty reduction & to set up agro-based industries.
  • Bringing in larger areas under irrigation so as to reduce monsoon dependence
  • Enhanced focus on agricultural exports, and
  • Incorporation of modern agricultural practices by the farmers and providing them with soil health cards
  1. Much greater focus on building up rural infrastructure, with specific focus on power, roads, and availability of safe drinking water.
  2. Rural industrialization wherein agro-based industries should be the first order of business.
  3. Vastly improving primary health care facilities and service delivery and quality up gradation in primary schools in rural areas. Higher public spending along with sectoral reforms can bring large gains, and
  4. Strengthening and wide scale usage of information and communications technology (ICT). 

Bajpai was of the view that some of the key policy reforms that the Government will have to consider are:

  1. Labor law reform
  2. Institution of a suitable exit policy for firms
  3. Small-scale industry product de-reservation
  4. Reform in the current SEZ framework
  5. Major investments in, and modernization of, India’s ports
  6. Reforms in India’s Trade and FDI regimes, especially focusing on manufacturing
  7. Reduce the size of the government by clubbing related ministries together which will also lead to better coordination among them.
  8. Expeditious translation of approved FDI proposals into actual investment require more transparent sectoral policies, bidding and selection procedures, and a drastic reduction in time-consuming red tapism
  9. Encourage much greater competition among states by devolving greater decision-making power to them
  10. Vigorously promote industry-academia linkages, and
  11. Introduction of life-line tariffs to streamline subsidies.

Bajpai said the new government should set up national goals for India, including:

  1. Achieve a doubling of per capita income in real terms between 2014 and 2021;
  2. To create 2 million new job opportunities in the agro industry sector per annum;
  3. To create 4 million new job opportunities in the manufacturing sector per annum;
  4. Achieve merchandise exports to the tune of $500 billion by 2017;
  5. Right to Health, including increasing public health spending to 3% of GDP by 2018 and to 5% by 2020;
  6. In public schools, major focus on vastly improving learning outcomes and dropout rates to be brought down to no more than 3% by 2020;
  7. Centralization of power in the hands of the federal and state officials to be effectively replaced by empowering the third tier of government, both with decision-making and financial authority, and
  8. To create a human resource of organized, trained and motivated youth for providing leadership in all walks of life, consider making the National Cadet Corps (NCC) for all high school students mandatory, and
  9. A part of the Indian economy to be driven by becoming a knowledge hub. Focus on universities with equal emphasis on teaching and research. To modernize and properly equip agricultural universities and set-up new universities that will specialize in bio-technology; rural development and utilization of IT for the masses; water; sustainable energy systems and railways.