Ranchi/New Delhi, April 4: Significant progress is being made to address the infrastructure deficit, said Arvind Panagariya, vice-chairman, NITI Aayog, while addressing the annual session of the Confederation of Indian Industry (CII) on Monday. Dr Panagariya said that there exists significant underemployment not only in the agricultural sector but also in industry.
He was speaking at a session on “Delivering the Promise that is Indian Economy.” Dr. Panagariya was in conversation with A K Bhattacharya, editor, Business Standard.
“There is considerable scope for large firms in the light manufacturing sector to move out of China due to rising wages and relocate in India,” he said.
A similar process happened in the 1980s when firms moved out of Taiwan and Hong Kong into China and began selling to the world market. This process will create an eco-system in which SMEs can become more productive, he said.
Commenting on other challenges being faced by the Indian economy, he said that good progress had been made in the last two years in addressing the infrastructure deficit.
Highway construction has been stepped up from 3,500 km in 2013-14 to 8,000 km in 2014-15 and to 10,000 km in 2015-16. The railways have also been able to step up track laying and modernization of railway stations.
In the power sector, electrification of villages has progressed according to plan and is expected to be completed by May 2018.
He said that financial stress in the banking system remains a challenge and discussions are on to address this. He lauded the government for bringing in reforms across areas including land and labor, issues that are in the concurrent list.
He said that many states had gone ahead and amended laws related to labor including Gujarat where firms located in special zones have the right to lay-off labor, irrespective of their size.
He concluded by expressing optimism on the reform process in India and said that far-reaching changes are taking place.