World must focus on labour-intensive industries, skill development: FM

Union Finance Minister Nirmala Sitharaman, during ADB's Governors' Seminar on the theme 'Policies to Support Asia's Rebound' in Incheon, Republic of Korea, today, said governments across the world must focus on labour-intensive industries and provide skill development in order to support people who will lose their jobs as the countries shift to net zero.

"We have to focus on labour-intensive industries & provide skill development. Industries are re-setting themselves in Web 3.0 era. Governments, together with industry, will have to bring in the skill sets required for a technology-driven society," said Sitharaman.

She said it is always a balancing act, particularly for a country like India where the population is very high and the youth component of the population is even better in favour of the country. “You have constantly keep balancing your priorities for greening your economy.”

At the same time, she said, even as one country is bringing in technology, the fear that it will replace humans is “real and live”, so it's important for us to equally – as much as we see the benefits of technology, as much as we see the transition to the greening – focus on all aspects. “We also have to design some layers in the economy, which will be labour intensive, and provide them that skills.”

She added: “Even as I am speaking, industries in India are very rapidly resetting themselves, to bring in bring in the web 3, to move over to industry 4.0.”

The FM, however, added that if the existing labour remains where they are, they are not going to be upskilled to meet up with these technologies infusion. “Then there will be crisis even for the manufacturer, so will be for his next generation of workers.”

The FM also listed out four 'I's -- Infrastructure, Investment, Innovation, and Inclusivity -- for long-term sustainable growth.

She also met Hayashi Nobumitsu, Governor, Japan Bank for International Cooperation on the sidelines of the 56th ADB Annual Meeting, and encouraged the engagement of JBIC with Indian financial institutions such as Exim Bank, NIIF, and lending banks to leverage the strength and complementarities of both countries for facing local, regional and global financial challenges.

The FM also spoke of government initiatives towards facilitating investment, like the PLIs scheme, NIP, and reforms in GST & Insolvency & Bankruptcy Code, among others, and hoped JBIC will use this enabling environment as an opportunity to expand marine products and seaweed processing in India.

The FM also highlighted the Modi government's policies, specifically developed to support the blue economy sector in India, and urged JBIC to bring investment to India for the processing of marine food products beyond cleaning and packaging.

During the discussions, Hayashi informed the FM that JBIC has already made investments worth $5 billion in infrastructure and manufacturing sectors in India and stated that JBIC is also looking at opportunities in the marine food processing sector in India.

Addressing the Indian Diaspora on Tuesday, the FM talked about the global recession issue. “Economies, which are large and have the wherewithal to face challenges, are looking at a long-drawn recession. Central banks in those countries do not have any other tool to handle it and are only going on raising interest,” she said.

FM said with this continuous rise in interest rates, a prolonged recession is likely. “Now, interest rates are going to go on and the recession seems to be there and appears to be continuing for a long period." She also urged emerging market economies to have strategies in place to become engines of growth in times like these.