Indian industry should tap into country’s competitive advantage: KV Subramanian, CEA

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NEW DELHI: The most important theme of the Atmanirbhar Bharat scheme is to enable Indian industry to tap into the country’s competitive advantage of a large domestic market, said KV Subramanian, chief economic adviser (CEA) of India.

“By far the most important theme of Atmanirbhar Bharat is to enable India to tap into its comparative advantages, which is the large labour force that we have, to create demand by enhancing employment opportunities in both the primary and secondary sector,” Subramanian said during a virtual conference hosted by the Federation of Indian Chambers of Commerce and Industry on Friday.

Another theme of Atmanirbhar Bharat is to nudge industry to focus on products that can be catered to lower income groups where margins are lower but volumes are much higher, he said.

The CEA also asked India Inc to set up factories in the hinterland to take advantage of the lower labour costs, considering the pandemic has removed certain restrictions on connectivity. “The Covid pandemic illustrates that factories can be set up possibly in the hinterlands…with these virtual meetings, the administrator can talk to the factory manager virtually,” said Subramanian. “The reason this should be done is because labour costs will be far lower. Even adjusted for skill, and that skill can be upgraded, labour costs will be lower, so the competitive advantage is even higher.”

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