Investments, like Taiwanese technology firm Foxconn’s proposed $5 billion (roughly Rs. 33,359 crores)project in Maharashtra, will bring about change in India’s labour market and promote competition among states, Chief Economic Advisor (CEA) Arvind Subramanian said on Thursday.
“Supposing the whole Foxconn experiment works in India. Supposing they do come to Maharashtra and start manufacturing… I think there will be impact on other states, it will create competition among states if this is going to work,” Subramanian said in his address in New Delhi at the International Conference on Jobs for Development.
“I think the whole manufacturing story is very complicated. Let’s see how Foxconn thing is going to work, maybe, for the change in the labour market landscape, I am very excited about that,” he said.
Referring to the past policies of protectionism, Subramanian termed licensing a historical policy blunder.
“I sometimes think that the biggest blunder, the historic policy blunder we made was protectionism. I think it was the licensing again that actually kept Indian industries small,” he said, adding subsequent policy initiatives permitted the services sector to grow, which helped create jobs.
“Because of policy, we have this service boom. I think that the one big benefit that did happen because of the services revolution was there was an enormous demand for skill and education, and that was really something good,” Subramanian said.