Manufacturing remains a challenge for the government: Arun Jaitley

Sachin Manawaria | The Dollar Business

A long term vision that strengthens India in the long-term is vital for the success of the Make in India campaign

  Arun Jaitley, Finance Minister, Government of India, has said that while the government has taken a number of steps to encourage manufacturing in India and improve the ease of doing business in the country, a revival and large scale reforms in the sector remains a challenge. Experts say that India needs to speed up the expansion of its manufacturing base as a direct transition from an agricultural-based economy to a services-based economy could lead to several economic challenges including the widening gap between the rich and the poor and growing unemployment. India has embarked on an ambitious target on increasing its share of manufacturing sector from current 15% to 25% by 2022. However, critics say that the “Make in India” initiative could be perilous to the economy in the long-term if it aims at mere import-substitution or to make India an export-driven economy, and have asked for a clear roadmap. Jaitley has acknowledged the risks. Speaking at the comprehensive workshop on Prime Minister Narendra Modi’s “Make in India” initiative in New Delhi today, Jaitley said, “Unless radical steps are taken, the challenges faced by the manufacturing sector will remain, a reality that we all must accept.” He added that all efforts must aim to lower the cost of manufacturing and improve the quality, otherwise India is at the risk of becoming a nation of traders instead of a nation of manufacturers. The workshop will cover 18 sessions with the participation of 25 Ministries and representatives of all the States with the aim to prepare a roadmap for short and medium term for the implementation of the “Make in India” initiative. Nirmala Sitharaman, Minister of State (Independent Charge) for Commerce and Industry, said that the workshop would help iron out the perceptions between the States and the Centre and also help in resolving inter-ministerial issues to facilitate ease of doing the business. Sitharaman added that a strong manufacturing sector had the potential to increase growth, entrepreneurship and employment and thereby improve India’s ranking in competitiveness and doing business measures. “Concrete attempts have been made by the Department of Industrial Policy & Promotion and Department of Commerce in cutting red tapism, simplifying rules and delicensing the business environment,” she said. Several export-oriented sectors including Chemicals, Cement, Pharmaceuticals, Food Processing, Railways, Textiles, Tourism, Gems & Jewellery, etc. were covered at the workshop, and the action plans will presented to the Prime Minister for further action. Industry representative associations, Federation of Indian Chambers of Commerce and Industry (FICCI) and Confederation of Indian Industry (CII), were the partner associations for the event and the sectoral sessions were chaired by the Secretaries of the concerned ministries.    

This article was published on December 29, 2014.