A weak link in competitiveness

INDIA MUST PRIORITISE IMPLEMENTATION OF LABOUR CODES; OVERSTATED PRODUCTIVITY BREEDS COMPLACENCY

- AJIT PAI

NAWORLD of heightened uncertainty, India requires greater autonomy in its strategic choices driven by enhanced self-reliance and improved global competitiveness.

India has shown accelerated progress in the past decade on both counts but has yet to bridge the gap to attain sufficient resilience and growth security for complete confidence in becoming a developed nation by 2047. A potential source of competitive strength, India’s anticipated demographic dividend, could prove the opposite if its formal employment outside of government jobs and employment outside agriculture do not grow materially faster.

Labour productivity is an important indicator that is closely linked to economic growth and competitiveness of an economy. It can be represented as output measured in GDP per unit of labour measured in hours worked over a reference period. High labour productivity generally results in high levels of economic activity and standards of living while making products and services more competitive and boosting their demand. India’s labour market remains the least efficient within large economies, with the lowest labour productivity rate of major economies.