India Inc needs to respond to various reform measures, including in the labour sector, undertaken by the government to accelerate the growth impacted by the COVID-19 pandemic, Chief Economic Adviser K V Subramanian said on Friday.
He emphasised that India is the only country which utilised the opportunity provided by the current crisis to unleash the second generation reforms that are focused on factor markets.
"If you look at the reforms that have happened since 1991, most of those reforms were primarily focused on product markets, including the reforms that were launched by the Atal Bihari Vajpayee government as well. But now when you look at the reforms that have been launched together with some of the previous ones, like IBC (Insolvency and Bankruptcy Code), (they are) basically an attempt to reform the capital,” he said.
IBC is followed by labour reforms, he said, adding that cost of labour is an important factor of production. Agriculture, which is another important factor, is part of the primary sector, the CEA noted.
"So, when you take these into account, there is a very important theme of Aatmanirbhar Bharat which is primarily about relying on the private sector enterprise and on the efficiency that private sector brings,” he said at an event organised by FICCI.
Subramanian said these reforms signal that the intent of this government is to rely on markets and that efficiency is primarily brought in by the private sector.
"Now India Inc actually needs to respond. We have enabled labour laws reforms etc…There are enough and more opportunities for ethical wealth creation to be done in Indian context…this is something that I would like widespread in India Inc,” he said.
Observing that the idea of Aatmanirbhar Bharat is not anathema to competition, he said self-reliance can never happen without adequate capabilities.
Capabilities are never built in a vacuum but they are built only by competing with the best, he added.