Indian Economy resilient to both External and Domestic Shocks but still faces many challenges;

Economy should be able to support Productive Employment and the Benefits of Economic Growth have to percolate down effectively to the most Marginalized and Vulnerable Segments of the Population: FM

Health facilities with focus on rural areas, addressing the requirement for education from primary to the higher and technical education level and development of vocational skills. He specifically mentioned about some of the important schemes being implemented by the Government to achieve inclusive growth are Mahatma Gandhi National Rural Employment Guarantee Scheme, National Rural Health Mission, Rashtriya Swasthya Bima Yojana, Sarva Siksha Abhiyan and Bharat Nirman. The results of these initiatives are very encouraging and we are hopeful that with its mandated work the Unique Identification Authority of India will improve efficiency in the delivery of public programs, he added.

As regards the development of vocational skills is concerned, the Finance Minister Mr Mukherjee said that the Government of India has announced a National Skill Development Mission, comprising a comprehensive skill development programme with a target to achieve 500 million skilled persons by the year 2022. He said that a three-tier institutional structure has been set up with a National Council headed by the Prime Minister for policy direction and review of skill development efforts in the country. He said that a National Skill Development Coordination Board-under the chairmanship of Deputy Chairman Planning Commission to enumerate strategies to implement the decisions of PM’s council and a National Skill Development Corporation (NSDC), a non-profit company under the Companies Act, 1956 being funded by the trust, namely, “National Skill Development Fund” are the other components. The objective of NSDC is to skill/upskill 150 million people in India including persons from rural areas by the year 2022, mainly by fostering private sector initiatives in skill development programmes, he added.

The Finance Minister Mr Mukherjee said that there are issues such as bottlenecks in the availability and quality of physical infrastructure, inadequacy of regulatory institutions in areas where private sector is coming up as a major player, rule of law and the larger issue of governance reforms that have a direct bearing on the competitive character of our economy and need to be addressed on a priority. More importantly, the success in addressing some of these issues at the national level has to be urgently replicated at the State and sub-State level, he added.

Mr Mukherjee said that another element in this vision is to build a spatially evolved and regionally balanced Indian economy. A country of more than 1 billion persons cannot be led by growth in a few sectors or a few cities and regions of the country in a sustainable manner. With nearly two-third of the population still living in the rural areas it is important for the economy to reach out to these people and provide opportunities to them from the ongoing economic expansion at their door steps. This is essential not only for strengthening the inclusive character of the growth process, but also for anticipating and addressing the demographic issues associated with unplanned urbanization.

Mr Mukherjee said that our economy has to be technologically innovative if we are to realise this vision of inclusive development. It requires supporting and sustaining basic research and technological innovations, and adapting and applying the products of this research and innovation in supporting and enhancing the well being of the Aam Admi. He said that ours is a large economy with multiple problems that cannot all be resolved with a business as usual approach or by merely scaling up the existing interventions and available solutions. He said that we have to be innovative and locate technological solutions to many of our persistent problems and have to increase our spending on research and technology upgradation. This is where the Indian industry would need to take a lead, he added.

The Finance Minister Mr Mukherjee said that most critical factor in realizing our vision is the human element be it at the level of leadership or at the level of a common worker on the floor of the factories, or in the fields and construction sites. He said that we would need the right kind of expertise and skills at all levels. He said that personally, he attach the highest importance to skill development to ensure that the country benefits meaningfully from its imminent demographic dividend. It is not an easy task, but the Government is conscious of the steps that need to be taken to translate the contours of this vision into a reality. Indeed, it has been steadily moving in that direction since its last tenure, he added.

In conclusion,, the Finance Minister Mr Mukherjee said that today India is at a stage where nothing seems impossible to do or achieve but we have to work together if the challenges we face have to be converted into genuine opportunities as we march ahead in realising our collective vision for the country.

Text of the speech of Union Finance Minister is as follows:

“It gives me great pleasure to join you all on your 105th Annual General Body Meeting. Your body represents a vast pool of talent and expertise in areas that include corporate affairs, taxation, finance and banking, manufacturing, infrastructure and energy. It is this diverse experience and your engagement with the socio-economic development of the country that brings me back to this forum time and again.

Let me share some thoughts on the state of the economy before I come to the theme of your meeting. We have done well in recovering our growth momentum from the impact of the unprecedented global financial crisis and other external shocks over the last two years. The GDP growth in the first half of 2010-11 has touched 8.9 per cent after an average of 7 per cent in the last two years. The economy has become remarkably resilient to both external and domestic shocks. More importantly, the recovery has been broad based with agriculture, industry and services all contributing to the consolidation of the growth process.

Agriculture sector GDP has increased by 2.5 per cent and 4.4 per cent during the first and second quarter of the current financial year as against the growth rate of mere 0.2 per cent in the last financial year. Merchandise exports during April-October of this financial year have increased by a healthy 27 per cent. The industrial production has achieved a cumulative growth rate of 10.3 per cent during April-October 2010. Sustained expansion in capital goods and consumer durables segments is a visible indication of the pick-up in industrial activity and also suggests an improvement in investment and business confidence. The services sector GDP has increased by over 9 per cent in the first half of the current financial year.

This rapid recovery of the growth momentum is comforting, but we cannot be complacent as there are several challenges that the Indian economy faces from its current external and domestic context. Global recovery remains fragile. The creeping increase in international crude oil and other commodity prices is a reality that we are already confronting. The oil marketing companies have had to hike the petroleum product prices earlier this month. There are also domestic supply side pressures on food prices that we have been grappling with for the past several months. Moreover, there has been significant increase in FII inflows even as there has been some moderation in FDI flows. So far foreign capital flows are well within the absorptive capacity of our economy and exchange rate and monetary management has not been unduly challenged. This can change at short notice, we have to be alert and monitor the developments constantly.

As we go back to the high growth path, the challenge is to harness growth to make the development process more inclusive, improve the reach and quality of our social and economic infrastructure, reduce regional imbalances and improving the opportunities for the less privileged, while strengthening the role of Government as an enabler.

This brings me to the theme of this meeting “Inclusive growth through skill development- vision 2017”. There is a strong perception that economic growth in recent times has not been sufficiently inclusive. Various population groups such as SCs, STs and other minorities have not benefited adequately from the rapid expansion of the economy. Gender inequality remains a pervasive problem with rapid structural changes in the economy, having a disproportionate impact on the wellbeing of women. This has to change. The economy should be able to support productive employment for all those who enter the labour force. The benefits of economic growth have to percolate down effectively to the most marginalized and vulnerable segments of the population.

In pursuance of inclusive growth, the Government has adopted a multipronged approach by focusing on sustained high growth, employment generation, providing basic health facilities with focus on rural areas, addressing the requirement for education from primary to the higher and technical education level and development of vocational skills. Some of the important schemes being implemented by the Government to achieve inclusive growth are Mahatma Gandhi National Rural Employment Guarantee Scheme, National Rural Health Mission, Rashtriya Swasthya Bima Yojana, Sarva Siksha Abhiyan and Bharat Nirman. The results of these initiatives are very encouraging and we are hopeful that with its mandated work the Unique Identification Authority of India will improve efficiency in the delivery of public programs.

Apart from formal school and higher education, development of vocational skills is an integral part of human resource development. The Government of India has announced a National Skill Development Mission, comprising a comprehensive skill development programme with a target to achieve 500 million skilled persons by the year 2022. A three-tier institutional structure has been set up with a National Council headed by the Prime Minister for policy direction and review of skill development efforts in the country. A National Skill Development Coordination Board-under the chairmanship of Deputy Chairman Planning Commission to enumerate strategies to implement the decisions of PM’s council and a National Skill Development Corporation (NSDC), a non-profit company under the Companies Act, 1956 being funded by the trust, namely, “National Skill Development Fund” are the other components. The objective of NSDC is to skill/upskill 150 million people in India including persons from rural areas by the year 2022, mainly by fostering private sector initiatives in skill development programmes.

The Corporation is also mandated with formation and governance of the Sector Skill Councils (SSCs) involving private sector. Sector Skills Councils will play a key role in development of curriculum, certification and accreditation that meet industry standards. I hope the co-operation of the private sector will help in making the skill development mission a success.

The pursuit of the vision requires that our economy becomes globally competitive, an economy that is efficient and cost effective, where the resources – man made as well as natural – are optimally and sustainably used. This alone can facilitate a high growth rate of the economy and hence opportunities for people over long period of time. We have made significant strides in unshackling and reforming our economic policy framework and the Indian industry has demonstrated that it can compete with the best in the world, yet the process is far from complete.

There are issues such as bottlenecks in the availability and quality of physical infrastructure, inadequacy of regulatory institutions in areas where private sector is coming up as a major player, rule of law and the larger issue of governance reforms that have a direct bearing on the competitive character of our economy and need to be addressed on a priority. More importantly, the success in addressing some of these issues at the national level has to be urgently replicated at the State and sub-State level.

Another element in this vision is to build a spatially evolved and regionally balanced Indian economy. A country of more than 1 billion persons cannot be led by growth in a few sectors or a few cities and regions of the country in a sustainable manner. With nearly two-third of the population still living in the rural areas it is important for the economy to reach out to these people and provide opportunities to them from the ongoing economic expansion at their door steps. This is essential not only for strengthening the inclusive character of the growth process, but also for anticipating and addressing the demographic issues associated with unplanned urbanization.

Finally, our economy has to be technologically innovative if we are to realise this vision of inclusive development. It requires supporting and sustaining basic research and technological innovations, and adapting and applying the products of this research and innovation in supporting and enhancing the wellbeing of the Aam Admi. Ours is a large economy with multiple problems that cannot all be resolved with a business as usual approach or by merely scaling up the existing interventions and available solutions. We have to be innovative and locate technological solutions to many of our persistent problems. We have to increase our spending on research and technology upgradation. This is where the Indian industry would need to take a lead.

The most critical factor in realizing our vision is the human element be it at the level of leadership or at the level of a common worker on the floor of the factories, or in the fields and construction sites. We would need the right kind of expertise and skills at all levels. Personally, I attach the highest importance to skill development to ensure that the country benefits meaningfully from its imminent demographic dividend. It is not an easy task, but the Government is conscious of the steps that need to be taken to translate the contours of this vision into a reality. Indeed, it has been steadily moving in that direction since its last tenure.

To conclude, let me say that today India is at a stage where nothing seems impossible to do or achieve. But we have to work together if the challenges we face have to be converted into genuine opportunities as we march ahead in realising our collective vision for the country. I thank you for inviting me on this occasion. I wish you all the best in your endeavours.”

More Under Finance

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

September 2021
M T W T F S S
 12345
6789101112
13141516171819
20212223242526
27282930