India’s central bank governor Shaktikanta Das said on Wednesday that the nation’s economy is set for a gradual recovery as efforts to reopen businesses are confronted with rising infections of Covid-19.
Addressing a webinar of the Federation of Indian Chambers of Commerce and Industry (FICCI) on the path forward from the pandemic, Das noted that some of the economic indicators that had shown signs of a pick up in June and July appear to be levelling off.
He suggested that the economy should prioritise five areas for sustainable growth including education and health; productivity; exports, which is linked to raising India’s role in the global value chain; tourism; and food processing and related sectors.
These should go hand in hand with five other sectors that he had mentioned earlier, namely the farm sector; renewable energy; information and communication technology (ICT) and start-ups; shifts in supply/value chains, both domestic and global; and infrastructure as the force multiplier.
India had missed the export opportunity that opened up post the last financial crisis in 2008 and should strive to improve its participation in global value chains, where it lags several developing economies, Das said, adding that appliances, electronics, telecom and automobiles can provide an edge to shipments.
“India has global presence in low GVC products such as gems and jewellery, rice, meat and shrimps, apparels, cotton, and drugs and pharmaceuticals. 21. Among the sunrise sectors that offer potential for higher exports in the post-COVID period are drugs and pharmaceuticals where India enjoys certain competitive advantages,” Das said.
The RBI Governor noted that India had recognised the importance of food security and had been focussing on post-production issues.
“Despite having huge growth potential, the food processing industry in India is currently at a nascent stage, accounting for less than 10 per cent of total food produced in the country. As a result, despite being one of the largest producers of several agricultural commodities in the world, India ranks fairly low in the global food processing value chain, ” he added.
“There is a need to move up the value chain,” he added.
India also needed to simultaneously improve the access to quality education and training as historically any improvement always has a significant multiplier effect, Das said.
Tourism is another sector that has the potential for tremendous growth over the medium term, he added.
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