MUMBAI: Reserve Bank of India governor Shaktikanta Das on Wednesday said Indian businesses should capitalize on food processing abilities and work on developing tourism to gain from opportunities thrown open by the covid-19 crisis.
“Tourism is one of the sectors most severely impacted by covid-19. At the same time this is also a sector where pent up demand could drive a V-shaped recovery when the situation normalizes,” said Das while addressing a webinar organized by FICCI on Wednesday.
“India has a tremendous potential in tourism and the challenge is to scale up our tourism market to enhance contribution to economic development. The employment elsaticity of tourism is very high and it needs to be capitalized. A multi pronged approach has been taken up by the government.”
Terming the food processing sector a sunrise industry, Das said its importance in consumer basket has increased over time, led by rise in per capita income, urbanization and the change in consumer perceptions in terms of quality and safety, said Das.
Despite being one of the largest producers of several agricultural commodities in the world, India ranks fairly low in the global food processing value chain. India can certainly move up by increasing its share of processed food exports for which quality standards will be a critical factor, said Das.
The central bank governor said RBI will focus on five key areas for the revival of the economy in the coming few months.
“There are five key areas that I propose to focus on that I think will determine stability and step up India’s growth in the medium term. First is Human capital with specific emphasis on education and health; second is productivity; exports which is leading to India’s role in the global value chain; fourth tourism; food processing associated productivity areas,” said Das.
He also said Indian businesses must work on ways to be a part of the growing global value chain, investnt on health, education and make efforts to increase productivity in order to survive the covid-19 crisis and revive the economy.
In order to raise demographic dividend, we have to raise investments on education and health substantially, Das said, adding public-private partnerships will improve investment on education and its quality.
A World Bank report shows that an additional year of education increases earnings by 10% in a year.