BJP’s national spokesperson on economic affairs Gopal Krishna Agarwal on Wednesday said the lack of critical reforms after 1991 has made Indian industry unfit to compete globally for now and appeared to back the NITI Aayog CEO’s comments on democracy making reforms difficult.
Citing the resistance to the government’s farm sector reforms, Mr. Agarwal said that everybody agrees that the agriculture sector needs to open up to stay competitive. “But still we see the reforms are being hindered currently… Our land reforms are pending, the 2013 land law is not very conducive to industry,” he said.
“We have to go for large-scale improvements in the factors of production and there has to be consensus. Today also, NITI Aayog CEO (Amitabh Kant) said – in democracy, it is so difficult to make any reform. Otherwise, why are those economic reforms are still pending? How much capital a political party can spend on reforms?” Mr. Agarwal asked.
The BJP spokesperson said economists and academics have not helped the government create a narrative to make reforms acceptable to all, though he conceded that the government is also responsible to frame the narrative.
“Reforms always have a time lag of benefits, but stakeholders’ benefits are always hurt. Whenever you take a reform, the beneficial stakeholders start strong movements and agitations, so it hinders the reforms process,” he said at a webinar hosted by CUTS on the pros and cons of India joining or not joining the Regional Comprehensive Economic Partnership or RCEP.
“The power sector is in a mess. Even logistics costs are 40% higher than others.. After 65-70 years, if we still find so much difficulty in carrying out these reforms, so how do we expect our industry to be competitive?” he said, stressing that the lack of these reforms means it is not conducive to open up domestic manufacturing industry ‘fully’ to global competition.
Asserting that the government is neither against trade agreements nor in favour of protectionism, Mr. Agrawal said it will be more beneficial for India to focus on bilateral pacts with the EU and U.S. now instead of multilateral pacts like RCEP and WTO.
“The demand for industry should be on creating a level-playing field, but they are always talking about protectionism and this is the problem – protectionism breeds inefficiency. Ultimately, certain sectors like auto, pharma have benefited from integrating into global supply chains and our industries will not develop unless they do so,” he said, adding that the government understands the need to ‘ultimately go for multilateral’ as well as bilateral trade pacts.