Need Of the Hour Is to Initiate Actions That Return the Economy to A High-Growth Track: VP Venkaiah Naidu

(Judicial Quest News Network)

The Vice President, Shri M Venkaiah Naidu today called upon the industry to work with the Government on implementing various reforms with greater vigour and pave the way for sustained economic growth in the coming decade.

Speaking virtually at ‘Mystic South, Global Linkages Summit – Towards a $1.5 Trillion Economy by 2025’ organised by the Confederation of Indian Industry, he said India is now at a decisive point in regaining its growth. “Now is the time for all the stakeholders to join hands and ensure sustained economic momentum”, he added.

Pointing out that the Union Government has taken a number of steps to revive the economy, he said, the industry on its part, must rise to the occasion and ensure that the upward growth trajectory continues. 

The need of the hour is to initiate actions that return the economy to a high-growth track and create gainful jobs for millions of workers by 2030, the Vice President said.

Stating that an annual GDP growth rate of 8 to 8.5% annually with continued productivity growth will be required to stimulate entrepreneurship, create jobs and drive balanced progress, Shri Naidu noted that India has been one of the 18 outperforming emerging economies over the past decade.

Stressing the need for India to leapfrog ahead to achieve the required employment and productivity growth, he said that global trends such as digitization and automation, urbanization, rising incomes, sustainability, health, and safety are assuming a new significance in the wake of the pandemic. “For India, these trends could catalyze growth and become the hallmarks of the post-pandemic economy”, he added.

The Vice President also called for creating global hubs in manufacturing, agricultural exports, digital services, next-generation financial products, high-efficiency logistics, power, sharing economy and modern retail.

Referring to the significance of the services sector in the Indian economy, he said it is currently accounting for over 54 per cent of the economy. With the ongoing vaccination drive, the services sector can expect to witness a revival.

Referring to the focus of the Summit on South India, Shri Naidu said the aspiration for the southern region to become a $1.5 Trillion Economy by 2025 is certainly achievable. He advised the Southern States to focus on reforms, ‘Ease of Doing Business’ and adopt the best practices to attract investments.

Listing out the opportunities in the region, he said that South India combines manufacturing with services, culture with modern values and education with skills.

Pointing out that most of the Southern States rank amongst the top in terms of ‘Ease of Doing Business’ rankings, he cited entrepreneurship, skilled workforce, presence of reputed educational institutions, leading IT companies, modern medical infrastructure and excellent connectivity between important cities as some of the major advantages of the region.

While lauding the healthy competition among various States in the country to industrialize and attract investments, Shri Naidu stressed the need for bestowing special attention on agriculture. He said there was a need to adopt a ‘positive bias’ towards agriculture to sustain the growth rate.

Shri Chandrajit Banerjee, Director General of Confederation of Indian Industry, Shri T V Narendran, President, CII, Shri C K Ranganathan, Chairman, CII Southern Region, Shri T T Ashok, Chairman, Mystic South and others participated in the event.

Following is the full text of the speech:

“I am delighted to be here this morning with all of you for the inaugural session of the ‘Mystic South – Global Linkages Summit—towards a $ 1.5 Trillion Economy by 2025’, organised by the Confederation of Indian Industry. It is a wonderful initiative and comes at a time when we are seeing a gradual improvement in the overall situation following the COVID-19 pandemic that has impacted lives and livelihoods over the past one-and-half years.

Indeed, India is now at a decisive point in regaining its growth. Now is the time for all the stakeholders to join hands and ensure sustained economic momentum. While the Union Government has taken a number of steps to revive the economy, the industry on its part, must rise to the occasion and ensure that the upward growth trajectory continues.

The need of the hour is to initiate actions that return the economy to a high-growth track and create gainful jobs for millions of workers by 2030. The industry should work with the Government on various reforms that need to be implemented with greater vigour and pave the way for sustained economic growth in the coming decade.

An annual GDP growth rate of 8 to 8.5 % annually with continued productivity growth will be required to stimulate entrepreneurship, create jobs and drive balanced progress. At the same time, India will need to maintain productivity growth at 6.5 to 7.0 per cent per year, the same as it achieved during the pre-pandemic period from 2013 to 2018.

Over the past three decades, India has been one of the 18 outperforming emerging economies to achieve robust and consistent high growth. Pro-growth reforms have lifted productivity and helped the country weather shocks and cycles. Real GDP growth has averaged 6.8 per cent annually since 1992, and has been inclusive. Clearly, economic prosperity has brought significant improvement in living standards.

India needs to leapfrog ahead to achieve the required employment and productivity growth. Fortunately, it has many opportunities to do so. Global trends such as digitization and automation, shifting supply chains, urbanization, rising incomes and demographic shifts, and a greater focus on sustainability, health, and safety are assuming a new significance in the wake of the pandemic. For India, these trends could catalyse growth and become the hallmarks of the post-pandemic economy.

We need to create global hubs in manufacturing, agricultural exports, digital services, next-generation financial products, high-efficiency logistics, power, sharing economy and modern retail.

The significance of the services sector in the Indian economy has been steady, currently accounting for over 54 per cent of the economy and almost four-fifths of total FDI inflows. India is home to 38 unicorns, adding a record number of 12 start-ups to the unicorn list last year. With the ongoing vaccination drive, the services sector can expect to witness a revival. Backed by several government initiatives, this sector in India has the potential to unlock huge opportunities which can create symbiotic growth across the world.

Dear sisters and brothers,

The revenue contribution of large firms to GDP in 2018 was 48 per cent, and India has the potential to achieve 70 per cent by 2030, in line with outperforming economies. Improving access to capital and easing other barriers to business would help the best-performing firms of all sizes climb the ladder of scale and global competitiveness.

I would like to now focus on the South – because this summit is about the region.

Dear sisters and brothers,

South India has all it takes to become a $1.5 Trillion Economy by 2025. While it could be an aspiration, it is certainly achievable. And I have many reasons to believe so. Let me list some of them out for you.

1. South India, a classic example of ‘Unity in Diversity’, combines manufacturing with services, culture with modern values and education with skills.

2. The strength of the maritime sector in the region can contribute immensely to the nation’s growth and needs to be tapped to the fullest.

3. The culture of South India is one of its biggest strengths and should be used as a soft power to bring the world to its doors. The dance forms of South India, its languages, literature, festivals, movies and talk shows should make it a mix of culture and competitiveness.

4. I am pleased to know that most of the Southern States rank amongst the top in terms of ‘Ease of Doing Business’ rankings in India. While each State will need to find its champion sectors to propel growth, any sector can be transformed into a champion if the enabling conditions for competitive businesses and gainful work opportunities are created.

5. Urbanisation is a big strength of the Southern region which should be leveraged. We also see agriculture as one of the top three opportunities for the region to flourish.

6.  South India has wonderful beaches, hilly terrains, some of the oldest and beautiful places of worship, health tourism and so on. How we are going to build on them will determine the holistic growth pattern of the region.

7. Entrepreneurship has always been and continues to be a strong point for Southern success. It is important to note that start-ups have also started flourishing in smaller cities of the region.

8. The ever-expanding, modern medical infrastructure is an added strength and is playing an increasing role in promoting medical tourism.

9. Important cities in the South like Hyderabad, Chennai, Bangalore, Thiruvananthapuram, Vijayawada, Kochi and Coimbatore have excellent connectivity, skilled workforce, reputed educational institutions and leading IT companies. Also, Tier-2 cities in the south provide ideal conditions to work and live, thanks to continuous and positive expansion.

When I see the states of South India, I see a powerhouse for the rest of India should emulate. I applaud and congratulate CII for Mystic South as it does not look at each State in isolation, but all of them together. At the same time, as all of us know, each State has its own unique culture and individual identity.

The South is a region of high promise, potential and progress. It combines all the elements that make it unique, mystic and magical.

I am certain that this summit will pave the way for South India to enhance its glory and reach its target by 2025 and well beyond. I wish Mystic South all success