Reserve Bank of India (RBI) deputy- governor Michael D. Patra has called for a multi-pronged approach to raise productivity.

Delivering the inaugural address at the Sixth Asia KLEMS Conference on Sunday at Lonavala, the RBI deputy-governor said that since multiple factors are at work, the policy response has to be powered by technological capital deepening, accompanied by long-term investment in research and development to nurture a competitive innovation ecosystem, and skill development through sustained educational attainments and training.

Patra pointed out that while the global slowdown has pulled down advanced economies (AEs) and emerging and developing economies (EMDEs) alike, it has imposed a major setback on EMDEs, pushing back their chances of catch-up or convergence.

It has also affected their ability to harness the benefits of newer technologies stemming from green transition and the digital revolution.

According to the RBI deputy governor, global growth was slowing down ahead of the pandemic relative to its performance up to the global financial crisis (GFC).

This loss of speed was led by AEs but EMDEs were pulled in by 2010-2011 and it was only East and South Asia that proved resilient and maintained historical growth trends.

However, even in these regions, the share of labour in output and its contribution by way of quality has fallen while capital accumulation has moderated, he added.

Amid such a background, Patra said that EMDEs need to leverage the potential of the services sector to drive productivity growth.

RBI watch

■ Global slowdown has affected emerging market economies such as India

■ Share of labour in total output is down

■ Productivity can be raised through enabling factors such as deepening capital base with technology focus