New
Delhi, Sep 12: If India has to maintain a sustained GDP growth of 9-10 per
cent per annum, it is crucial that the manufacturing sector grows steadily at
14–15 per cent per annum over the next three decades, noted a recent
ASSOCHAM-EY joint study. The joint report stated that while the Goods and
Services Tax (GST) has to a large extent addressed prevailing regulatory issues,
states across India must individually look into bureaucratic obstacles along
with other obstructive regulations and policies on priority, based on their own
manufacturing goals. “Manufacturing sector in each Indian state and union
territory has the potential to grow either directly — by setting up new
industries — or by creating ancillary facilities, infrastructure and necessary
forward-backward linkages to existing ones,” noted the ASSOCHAM-EY study titled
“Sustaining India’s growth by accelerating manufacturing.” It also said that
for states, the best way to grow is to focus on industries where a particular
state has competitive edge over others in terms of raw material availability,
demand, user industries, logistics and availability of skilled manpower, besides
geographical location. “Robust domestic demand, improved FDI (foreign direct
investment), increase in exports, higher infrastructure spending and capital
formation, supportive fiscal and monetary policies suggest India’s
manufacturing sector is headed for a robust growth,” said the report.
Highlighting that optimism in India’s economy is largely stemming from launch
of GST, apart from macro-economic and financial market stability, the study
said that the government seems committed on providing conducive environment for
growth of manufacturing. Noting that India’s overall exports grew by 3.94 per
cent to US$22,543.80 million in July 2017, the eleventh straight month of
increase, and exports of engineering goods to China alone grew 123 per cent to
US$629 million during April—June this fiscal, the study stated, “Equally
heartening is the fact that manufacturing and trade are picking up in the
country.” It also said that government’s recent Banking Regulations Amendment
Ordinance is a positive step to address problems of non-performing assets
(NPAs) that have been clogging the Indian banking system. The study further
said that the government's Make in India initiative will help elevate country’s
manufacturing sector as it aims to increase share of manufacturing in the GDP
(gross domestic product) to 25 per cent from current 16 per cent and to create
100 million new jobs by 2022. UNI
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Manufacturing sector must grow 14-15 pc for sustained 9-10 pc GDP growth: Assocham
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