Raising Productivity, Deeper GVC Integration Key To India’s Long-Term Growth: NITI Aayog VC Suman Bery

New Delhi, Feb 2 (KNN) India’s long-term growth prospects hinge on raising productivity and aligning domestic economic priorities with evolving global trends, NITI Aayog Vice Chairman Suman Bery has said assessing the Union Budget 2026–27 and India’s development trajectory.

In a column in The Economic Times, he stressed that stronger integration with Global Value Chains (GVCs), supported by sustained public investment and structural reforms, is essential for long-term, inclusive growth. He added that moving labour from low-productivity work to higher-value sectors is a core pillar of India’s development approach, especially given its labour-abundant nature.

Highlighting the Union Budget’s emphasis on capital spending, Bery said sustained public capex is crucial for boosting productivity and catalysing private investment. With capital expenditure increased to over Rs 12 lakh crore, the focus is on strengthening infrastructure, improving connectivity and expanding productive capacity, while crowding in private investment over the medium term.

Bery said deeper integration into global supply chains, especially in electronics, semiconductors, pharma, EVs, renewables and textiles, is vital to positioning India as a trusted manufacturing hub. Initiatives like India Semiconductor Mission 2.0 and renewed support for pharma, rare earths and textiles are strengthening India’s role in key value chains.

He said nearly 17 crore jobs were created between 2017–18 and 2023–24, indicating strong employment growth, but stressed the need to further boost female labour force participation. Citing Periodic Labour Force Survey (PLFS) data, he pointed to the textile sector as a key driver for creating local jobs and expanding women’s workforce participation.

Bery highlighted productivity concerns, citing ILO data showing that an American worker was nearly nine times more productive than an Indian worker in 2020, while China made sharp gains over the previous decade. He said closing this gap by expanding the workforce and raising productivity is a central economic challenge.

On fiscal management, Bery notes that the government continues to prioritise discipline and debt sustainability. The debt-to-GDP ratio is estimated at 55.6 percent in BE 2026–27, marginally lower than 56.1 percent in RE 2025–26, while the fiscal deficit is budgeted to decline from 4.4 percent of GDP in RE FY26 to 4.3 percent in BE FY27.

He further highlights the Budget’s alignment with India’s expanding engagement  with global markets, including trade and investment partnerships, particularly with the European Union. Strengthening integration with global value chains is seen as complementing efforts to attract stable, long-term foreign investment and boost exports.

Concluding, Bery said India’s potential growth is about 7 percent, but faster expansion is needed to achieve Viksit Bharat by 2047. He described the Budget as a balanced and responsible package that aligns near-term fiscal priorities with long-term reforms, boosts investment, including foreign inflows, and strengthens confidence in India’s growth outlook.

(KNN Bureau)