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States need to be more involved in the country’s export efforts, according to Rajiv Kumar, Vice-Chairman, NITI Aayog. This will boost exports by removing impediments, especially in infrastructure, he said. Kumar was speaking after the ‘Breakfast with BusinessLine ’ event here on Friday, which was attended by top CEOs and entrepreneurs.
Livelihood matters
States typically don’t view supporting the export sector as an attractive proposition as it does not generate revenue for them, Kumar observed. NITI Aayog would like to show them that it is not just the revenue that matters here but the livelihood exports create, and the income they generate for people, he said.
Improvement in export infrastructure across States, he added, requires bigger focus. Currently, four-five States account for more than 60 per cent of exports because they have major ports. If the Central and State governments come together to work towards cutting logistics costs, the benefits will be immense, he said. It’s here, he pointed out, that State governments need do more.
“We do not have an integrated transport system. We have been working in silos,” he rued. A sharp rise in exports, he said, will give a fillip to the ‘Make In India’ programme. He attributed the slower-than-expected response to ‘Make in India’ to a large surplus capacity created towards the end of the previous decade. “Every country in the world has used only external demand to bolster the capacity,” he said, adding: “Prime Minister (Narendra Modi) also stressed the need to boost exports.”
Ease of doing business
The Centre’s role in improving the ease of doing business is limited, remarked Kumar. From next year, the government plans to get the Department of Industrial Promotion and Policy (DIPP) to offer rankings on ease of doing business among States based entirely on the perception of the industry and investors, he said. Once these rankings come out, States will take steps to improve their competitiveness, he added.
Kumar particularly pointed out that labour in India is over-priced. “This is a result of our democracy and we have to accept it,” he said. The NITI Aayog Vice-Chairman also spoke his mind on Indian industry. “India’s share in global services export is 3.2 per cent. But here again, unfortunately, companies focus largely on wage arbitrage rather than on products,” he said.
He lamented the industry’s lack of interest in R&D. “We are not an R&D-oriented country,” he observed.
When asked why corporate governance norms are more stringent in India than developed economies, Kumar said the lack of adequate self-regulation by India Inc has caused a trust deficit between the political establishment and corporates. “This was not the case some decades ago,” he said.
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