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Focus on economic development competitiveness essential to growing Nebraska

Focus on Economic Development and Competitiveness Essential for India's Growth: Insights from NITI Aayog CEO

In a rapidly evolving global landscape, India's path to becoming a developed economy hinges on a sharpened focus on economic development and competitiveness, according to BVR Subrahmanyam, the CEO of NITI Aayog, India's premier policy think tank. Speaking at a recent event, Subrahmanyam emphasized that for India to achieve its ambitious goal of transforming into a high-income nation by 2047, both the central government and states must prioritize strategies that enhance productivity, innovation, and global integration. This call to action comes at a pivotal moment when India is navigating post-pandemic recovery, geopolitical tensions, and the urgent need to create millions of jobs for its burgeoning youth population.

Subrahmanyam highlighted the multifaceted nature of India's economic journey, pointing out that the country has made remarkable strides in recent years. With a GDP growth rate consistently hovering around 7-8% annually, India has emerged as the world's fifth-largest economy, surpassing several developed nations in terms of purchasing power parity. However, he cautioned that sustaining this momentum requires more than just macroeconomic stability; it demands a granular approach to development at the state level. "Economic development is not a one-size-fits-all proposition," Subrahmanyam noted. "States must compete not just with each other but on the global stage, attracting investments and fostering ecosystems that drive innovation."

One of the core pillars of this strategy, as outlined by the NITI Aayog chief, is enhancing competitiveness through targeted reforms. He stressed the importance of improving the ease of doing business, which has seen significant progress under initiatives like the Business Reforms Action Plan. States such as Andhra Pradesh, Telangana, and Gujarat have led the way by streamlining regulations, reducing bureaucratic hurdles, and investing in digital infrastructure. These efforts have resulted in a surge of foreign direct investment (FDI), with India attracting over $80 billion in FDI in recent fiscal years. Subrahmanyam argued that competitiveness is not merely about attracting capital but also about building resilient supply chains and promoting exports. He referenced India's success in sectors like information technology and pharmaceuticals, where competitive advantages in skilled labor and cost efficiency have positioned the country as a global leader.

Delving deeper into the challenges, Subrahmanyam acknowledged the structural hurdles that could impede India's growth trajectory. A key concern is the demographic dividend, which, if not harnessed properly, could turn into a demographic liability. With over 1.4 billion people and a median age of just 28, India has the world's largest youth population. Yet, unemployment rates, particularly among educated youth, remain high, exacerbated by skill mismatches and inadequate vocational training. To address this, he advocated for a revamp of education and skilling programs, aligning them with industry needs in emerging fields like artificial intelligence, renewable energy, and biotechnology. "We need to create an ecosystem where our youth are not just job seekers but job creators," he said, urging states to invest in entrepreneurship hubs and startup incubators.

Urbanization presents another critical dimension of economic development. Subrahmanyam pointed out that India's urban population is projected to double by 2050, putting immense pressure on infrastructure and resources. Cities like Mumbai, Delhi, and Bengaluru are already grappling with issues such as traffic congestion, pollution, and housing shortages. To turn this challenge into an opportunity, he recommended smart city initiatives that leverage technology for sustainable urban planning. Drawing from global examples, such as Singapore's efficient public transport systems and China's high-speed rail networks, he suggested that India could accelerate its infrastructure development through public-private partnerships. The ongoing projects under the National Infrastructure Pipeline, valued at over $1.5 trillion, are steps in the right direction, but Subrahmanyam emphasized the need for faster execution and better inter-state coordination.

On the environmental front, competitiveness must be balanced with sustainability, according to the NITI Aayog CEO. India, as one of the most vulnerable countries to climate change, faces risks from extreme weather events, water scarcity, and rising sea levels. Subrahmanyam called for a green growth model that integrates renewable energy into the economic framework. With ambitious targets to achieve net-zero emissions by 2070, India is ramping up solar and wind power capacities, aiming for 500 GW of non-fossil fuel energy by 2030. He highlighted how states like Rajasthan and Tamil Nadu are leading in renewable energy production, creating jobs and reducing dependence on imported fossil fuels. This shift not only enhances energy security but also positions India as a competitive player in the global green economy, attracting investments from environmentally conscious multinational corporations.

Innovation and technology adoption form the bedrock of long-term competitiveness, Subrahmanyam asserted. He praised India's digital revolution, exemplified by the Unified Payments Interface (UPI) and the Aadhaar biometric system, which have democratized access to financial services and government benefits. These innovations have propelled India to the forefront of the digital economy, with fintech startups booming and e-commerce platforms like Flipkart and Amazon transforming retail. However, to maintain this edge, he urged greater investment in research and development (R&D). Currently, India's R&D spending is around 0.7% of GDP, significantly lower than global leaders like the US (2.8%) and China (2.4%). Subrahmanyam proposed incentives for private sector R&D, collaborations with universities, and policies to protect intellectual property, which could spur breakthroughs in areas like quantum computing and biotechnology.

Subrahmanyam also touched upon the role of trade and globalization in boosting economic development. In an era of de-globalization and supply chain disruptions, India must diversify its export basket beyond traditional sectors like textiles and agriculture. Initiatives such as the Production Linked Incentive (PLI) scheme, which offers subsidies to manufacturers in 14 key sectors, are designed to make India a manufacturing hub. He cited the success in mobile phone production, where India has become the second-largest exporter globally, thanks to companies like Apple shifting assembly lines from China. To further enhance competitiveness, he recommended negotiating more free trade agreements (FTAs) with regions like the European Union and the Middle East, while safeguarding domestic industries from unfair competition.

Addressing regional disparities, Subrahmanyam stressed that inclusive growth is essential for national competitiveness. States in eastern and northeastern India, which lag behind their western and southern counterparts in per capita income and infrastructure, require special attention. Programs like the Aspirational Districts initiative, which focuses on improving health, education, and livelihoods in underdeveloped areas, have shown promising results. By fostering balanced regional development, India can unlock untapped potential and reduce inequalities that hinder overall progress.

In conclusion, Subrahmanyam's vision for India's economic future is one of proactive, collaborative, and innovative action. By prioritizing economic development and competitiveness, India can not only achieve its 2047 development goals but also emerge as a global economic powerhouse. This requires a concerted effort from all stakeholders—governments, businesses, and citizens—to build a resilient, inclusive, and sustainable economy. As the world watches India's ascent, the emphasis on these fundamentals will determine whether the country realizes its full potential or falls short of its aspirations. The path ahead is challenging, but with strategic focus and bold reforms, India stands poised to redefine global economic dynamics in the coming decades.

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