MANUFACTURING MUST GROW
The manufacturing sector must grow by at least 12% per annum over the next decade if India is to achieve GDP growth of 8% to 9%, the National Manufacturing Competitiveness Council (NMCC) has said in its recommendations in the final draft of the National Strategy for Manufacturing, which was discussed at the 4th meeting of the NMCC, held under the chairmanship of Dr. V. Krishnamurthy here on Friday. Progress of the work done so far by NMCC was discussed at the meeting which was attended, among others, by Shri V. Govindarajan, Member Secretary, NMCC; Dr. Ajay Dua, Secretary (Industrial Policy & Promotion); Shri Priyadarshi Thakur, Secretary (Heavy Industries & Public Enterprises); and Shri Ashok Jha, Secretary (Economic Affairs).
Following the meeting, members of the NMCC called on the Prime Minister Dr. Manmohan Singh and briefed him on the activities of the Council, besides seeking his guidance on various issues relating to India’s manufacturing competitiveness.
The NMCC has recommended the following main Goals for Manufacturing Sector:
· If the Nation’s GDP is to grow at balanced 8 - 9% per annum then the manufacturing sector has to grow at 12% - 14% per annum over the next decade compared to less than 7% growth in the last two decades;
· Manufacturing is a force multiplier as investments in manufacturing yields four times effect on GDP growth;
· Manufacturing is crucial for the robust growth of the economy, of exports and of generating substantial relevant employment;
· Growth target of 12% in manufacturing would create about 1.6 to 2.9 million direct jobs annually and in addition 2 to 3 times new jobs indirectly; and
· The long term goal should be to aim at much higher contribution of manufacturing in the GDP (25% to 35%).
The approach adopted by NMCC is based on the premise that improving competitiveness, and not protection or subsidy, is the remedy. It comprises:
· A National level strategy paper on Manufacturing;
· Taking up sub-sectors having immediate potential for gains in terms of growth, market share, employment and identify impediments – initiate suitable action;
· In addition Examine in-depth, certain generic issues cutting across most sub-sectors (e.g. HRD/ Training, Innovation, Taxation, etc.); and
· Engage various States in the whole process (they drive manufacturing, investments, employment generation etc.).
The Action Plan suggested by the NMCC includes implementation of ‘National Strategy for Manufacturing’ by launching a National Manufacturing Initiative with a 10-year horizon, and setting short term, medium term and long term goals looking at both national as well as firm level issues.