Context

• India Competitiveness Initiative aims to develop a roadmap for India’s growth policies to aggressively push the nation towards middle-income and beyond by 2047, the 100th anniversary of India’s independence
• As part of this initiative a new report is published jointly by the Institute for Competitiveness and the Economic Advisory Council to the Prime Minister.

The report has assessed India’s current competitiveness

• Poverty has fallen over time in India but inequality has increased
• While India’s productivity growth, captured by change in gross domestic product per employee, has been good, the mobilisation of labour has lagged.
• India has not been able to pull enough people from agriculture, and labour force participation, particularly for women, has been abysmally low.
• Large firms have driven productivity growth, while most people work in small firms. 
• Small groups of regions are driving growth and large parts of the country seem unconnected to the development process. 
• Given the prevailing economic condition, it is not surprising that the pace of urbanisation has been slow. 
• The report has narrowed these issues into three kinds of broad challenges

• Shared prosperity
• Jobs
• The policy implementation challenge

Some of these problems are well known but have not attracted the desired level of policy attention.

Suggestions

• In terms of policy priorities, focus should be on creating competitive jobs which can be created only if India has competitive firms. 
• It also suggests launching sector and location-specific initiatives to improve regional and industrial policies. 
• The report rightly argues for strengthening the federal structure and improving public-private collaboration. 
• The broad assessment and recommendations of the report are well intended and provide a good starting point for policy interventions.

However, if India has to attain higher sustainable growth, more probing questions will need to be asked. For instance, 

• Why is India not able to improve the quality of education, and what can be done in this context? Unless the quality of human capital improves dramatically, India’s competitiveness will continue to suffer. 
• A large number of Indian firms remain small and fail to attain scale. Why is policy unable to address this problem? 
• Will the policy of protecting domestic firms from competition and subsidizing production make India more competitive over time and help create the jobs it needs? 

India will need to address a number of such policy issues in the near term and, as the report notes, it will require coordination at different levels of the government. The process must start soon.

https://www.business-standard.com/article/opinion/india-s-development-drive-122090200011_1.html