Vivid News 24: According to Reserve Bank of India Governor Shaktikanta Das, policies in South Asian nations must foster an environment that is conducive to luring new private investment, with the public sector playing a leading role in sectors like infrastructure, education, and health that have the potential to generate significant positive externalities.
Shaktikanta Das, governor of the Reserve Bank of India, stated on Friday that it is essential to implement significant structural reforms in order to improve the potential growth trajectories of the economies in the South Asian region, even though sustained and broad-based economic recovery remains the current policy focus. He was addressing a symposium the International Monetary Fund hosted on improving productivity.
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In this context, the governor emphasized a few priority policy issues in particular. In order to achieve desired structural change, he explained, resource allocation must be improved. Production must be moved from low- to high-productivity sectors, and innovation must be encouraged.
Second, the Governor brought up skill mismatches, which are a major barrier to resource reallocation and call for governmental attention on education and skill improvement. He stated that this was crucial for the South Asian region in particular, as the region’s favorable demography would necessitate labor-intensive industrial techniques that were also globally competitive.
Third, even though free trade and foreign direct investment (FDI) have historically been beneficial for the diffusion of technology and an increase in productivity, the region needs to invest more in research and development than it currently does, and the policy environment for entrepreneurship and scientific research needs to be improved.
Fourth, he said that it would be necessary to increase investment in physical infrastructure, particularly in energy, transportation, and telecommunication, which are key factors in productivity growth.
The governor also emphasized that scalability and resilience would be prioritized when designing digital infrastructure, such as data centers, cell towers, and fiber connectivity. He asserted that dependable internet access was necessary for the new age growth engines of fintech, e-commerce, EdTech, healthtech, and foodtech.
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