Globalisation is set to grow at slower pace than before: CEA Anantha Nageswaran

“…there are clear signs that manufacturing and services are likely to be challenged. We have established a strong position in IT-enabled services and have good exposure to IT-enabled services manufacturing. Our share may be lower, but we are making sincere efforts to raise our manufacturing share of GDP. However, all these sectors will also face severe headwinds due to geopolitical fragmentation,” Nageswaran said.

“And therefore, agriculture and food security are going to become increasingly important… agricultural exports will be both economically imperative and also geostrategic in this context. In fact, there is considerable scope for diversification across the farming sector, which could drive growth in many allied activities such as agriculture, fisheries, poultry, dairy, etc., moving beyond the cereals on which we have traditionally focused,” he added.

Nageswaran, however, pointed out that land availability per capita in India is very low, with the country having the lowest per capita land availability in the G20. In other words, India has the highest population density per square kilometre in the G20, making land a scarce resource.

Discussing a research report on the misallocation of land in India, the CEA stated: “There are two key dimensions to this research: one is to make agriculture more productive, and the second is to free up land to accelerate industrialisation.”

Addressing the challenges in land use, in the manufacturing sector, Nageswaran explained that land in India is subject to so many regulations that enterprises are unable to utilise the full land available to them for productive purposes.

“Some of the rules related to setbacks on all four sides, the amount of parking that enterprises are required to set aside, and the overall built-up area that can be constructed on a given plot, are so extensive and pervasively onerous that even an extremely law-abiding small enterprise will not be able to use more than 20 to 30 per cent of the land available on the ground floor,” he said.

Setbacks refer to the distance between a building and the property lines on all sides.