Economic experts propose boosting public spending, funding education to accelerate growth
With the goal of giving the economy a much needed stimulus, industry body CII has recommended that the government significantly increase capital expenditure and prioritize investing in education. Stressing that growth hinges on addressing long pending reforms, CII President Sanjiv Puri said utilizing the windfall from RBI could help lift capital expenditure by another 25%.
India's capex for the current fiscal stands at Rs. 9.49 lakh crore as per revised estimates. While spending was raised substantially in the past two years, CII contended a further increase is essential to strengthen competitiveness and support broader investment. The additional reserves the government obtained present an opening to channel more towards developmental activities.
Skills shortage was another major concern highlighted. Puri pointed out India lags nations such as the US and Japan in terms of people with formal training. Bridging this gap demands stepping up public spending on education to 6% of budget and deepening focus on early learning programs. Investment must also be poured into vocational courses to raise the percentage of skilled labor from the current estimated 5% to 25%.
On the industrial front, seamless coordination of trade, investment and industrial policies was underscored as vital for greater participation in global value chains. Furthermore, targeted employment incentive schemes and easing female workforce participation were suggestions to generate jobs. Overall, timelyimplementation of outstanding economic reforms was stressed as crucial to realizing India's full growth potential in a world facing multiple headwinds.
