High Productivity Needs Fresh Mindset

FOR A NATION blessed with land, nature in abundance with its sunshine, rivers, wind, and natural resources, and the societal need to grow economically, India has poor labour productivity

- Srinath Sridharan

Yet we are not lazy people, are we? 

There is something that has worked for other nations whose productivity norms overshadow our attempts. Indian productivity levels over the past decade have been a topic of concern, with data and statistics highlighting the relatively lower productivity compared to other manufacturing economies. Yet this is a sensitive topic – both politically and policy-wise. While newer policy initiatives have been launched, some with success, is there an Indian mindset problem about productivity?

A Definition 

Productivity refers to how efficiently resources are used. Labour productivity is calculated by dividing the output by the amount of labour used to generate that output.

The decades-long inefficiencies of India’s infrastructure, logistics and supply-chains, and corrupt practices, put a considerable burden on achieving cost efficiencies for businesses operating in India, leading to low productivity and increased cost of production. There has been a policy push with political tenacity to make India a global manufacturing hub. There are initial success sectors like electronics where it is seeing good traction. But that’s only a portion of the larger potential we need to build. Introspecting on this theme is not a negative attitude, but rather starts from positive intent to discuss how to develop India as a global hub of productivity.