NITI Aayog CEO Calls for Sweeping Economic Reforms to Enable India's Transformation

Addressing the Confederation of Indian Industry’s Annual Business Summit 2024, Subrahmanyam outlined several critical areas requiring reform. These include foundational changes in education and skills development, increased efforts to boost female labor force participation, a wide range of agricultural policy reforms, and enhanced private sector investment in both infrastructure and governance.

NITI Aayog CEO BVR Subrahmanyam has advocated for a comprehensive set of reforms at the Confederation of Indian Industry’s Annual Business Summit 2024, which includes reducing trade tariffs and procedures, eliminating protectionism, and deregulating the services sector to spearhead India's economic transformation.

During his speech, Subrahmanyam emphasized the critical need for foundational changes in education and skills development to capitalize on India’s demographic dividend. He also highlighted the importance of increasing women's participation in the workforce and implementing a wide range of agricultural policies, alongside boosting private sector investment in infrastructure and reforming governance.

“I think the primary and the most fundamental reform that is needed is in education and skilling. Without that the rest of it is a complete flop story,” he remarked on Friday.

“There are multiple ways of doing it. The government should just hand over skilling institutions to the private industry and actually ask them to run it while the government pays for it,” he suggested.

Addressing the low female labor force participation in India, Subrahmanyam underscored the necessity for a variety of interventions to educate and skill women, provide a safe working environment, and create sufficient job opportunities and facilities. “This is fundamental. No economic transformation can happen without women entering the workforce in large numbers,” he stated, stressing the need to unlock the potential of India's Nari Shakti.

Subrahmanyam also pointed out that India is not significantly involved in global value chains and urged for a strategic push in this area. “To get into global value chains means a fundamental change in a lot of things. It means low tariffs, low procedures and no protectionism,” he explained.

“I think we should go for very low tariffs when you should sign many more free trade agreements and try not to protect anybody or any sector so that we can actually be on par with the rest of the world,” he added.

He noted that while India has a competitive edge in the services sector due to its skilled manpower and strong education system, it has yet to become a global leader in education, healthcare, or professional services. “I think we need to do more, which means not only loosening regulations but also allowing outsiders to come into the country so that we actually benchmark ourselves against the best and go out and open markets for ourselves outside,” he added.

Subrahmanyam also emphasized the critical role of agriculture in the economy and the need for comprehensive interventions to position India as a global agricultural leader and a significant food provider.

He recognized rapid infrastructure development in India but called for increased private investment in the sector.

“And last but not the least, it’s about government and bureaucracy. I think there is a need to change the way we function, our efficiencies, our structures, our processes, all of that needs to change,” he advocated.

Subrahmanyam listed several positive factors currently benefiting India, such as its diverse economy and youthful population, which are poised to drive global growth in the coming decades. He also mentioned geopolitical advantages, technological disruptions, and a vast domestic market that enables Indian companies to expand and compete globally.

“India’s development model is a great success and is a role model for the entire global south. So if we make a success over the next 10-20 years there are many other countries in the world including in the global south, which will look up to India as a model,” he said.

However, Subrahmanyam noted significant domestic challenges, including the need to effectively utilize its demographic potential and address regional disparities to ensure balanced growth across the country.

“The second thing is regional imbalances within the country. I think we need to ensure that different regions of the country actually grow at a similar pace which will require multiple transformations in terms of industry and demand,” he added.