Rising Re a step towards long-term growth - Economic Summit
03 Dec '07
4 min read
Responding to a question from the floor on whether increased productivity could offset the rupee's appreciation, Bery said that while labour productivity in India is rising, “our skill levels are abysmal.” One of the burdens the private sector faces is providing “massive remedial education” for its workforce, he added. Lyons pointed out that “capacity is as big an issue as productivity.” In China, the 10th largest textile manufacturer has a greater capacity than India's entire textile sector.
With a much younger population than China, India has to invest more on the supply side of the economy. Lyons said that with intra-Asian trade booming, India has the potential to influence South Asia economically in the way that China has influenced East Asia. The balance is shifting: by 2020, Asia's share of global trade is projected to be 2.5 times greater than the US's share. Today, with one-fifth of the world's population, but just one-fiftieth of the world's GDP and one-hundredth of the world's trade, India has a tremendous opportunity to become a political and economic leader in the region.
“India today is better placed than at any time in the past to provide goods and services to the world,” said B. Ramalinga Raju, Founder and Chairman, Satyam Computer Services, India. But India needs a scenario in which the rupee does not strengthen significantly. He argued that much of the rupee's rise is because of capital inflows and suggested that India invest globallyas a balancing force. Foreign companies, faced with rising costs, are questioning whether to continue engaging with India. As a result, said Raju, “India today is losing many opportunities it's not fully realizing.”
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