Lowering interest rate imperative to make India a mfg hub: Jindal

The Dollar Business Bureau

It is imperative to decrease the cost of manufacturing, including interest (or capital) cost, for turning India into a global manufacturing hub, said  JSW Group Chairman and MD Sajjan Jindal while speaking at the Manufacturing Summit organised by Confederation of Indian Industry (CII).

Jindal is of the view that the rates of interest are going to reduce soon owing to low inflation in the market and the excessive funds held by the banks.  According to him, one needs to fix the cost of capital which should come down in order to make the manufacturers more competitive.

India also needs to develop an ecosystem in the manufacturing domain to ensure high competitiveness of manufacturers. The elements of value addition and research and development support are equally necessary to boost the manufacturing sector.  

The concern was also echoed by Ajay Shankar, Chairman, Expert Committee on Regulatory Approvals, Department of Industrial Policy and Promotion, who said that it is not just the interest cost but the associated costs that should be brought down in order to strengthen manufacturing in the country.

The government had announced increasing the share of manufacturing sector to 25 per cent of the economy, which according to Jindal, can be achieved only if the Indian manufacturing grows at 12 per cent per annum in the next six-seven years.

Jindal also commented on the government’s recent move of demonetisation calling it a temporary pain that will fetch results in the long run.

"Prime Minister Narendra Modi is doing a tough job to switch parallel economy to digital economy. We see challenges, but organised sector across the country is shifting towards digital economy," elaborated Jindal.