The Hindu Business Line : FICCI seeks steps to boost manufacturing

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New Delhi Feb. 14 To take the share of the manufacturing sector in the GDP to 22 per cent from the present 15 per cent by 2015, the FICCI has asked the Government to reform the labour laws and incentivise innovation and technology.

The chamber also sought bridging the skill gap for the sector, speedy development of infrastructure and reducing transaction cost for the purpose.

The FICCI pointed out that there was a serious gap between the availability of skilled manpower and the requirement of industry. The textile and clothing sector will have the highest manpower requirement in the entire manufacturing sector in the next few years. Around five million people will be required mainly at the basic skill level in the sector out of which four million are required for the garment sector only. This will require massive expansion and modernisation of training institutes across the country that can be done with public private partnership scheme.

Power cost

On infrastructure requirements, the chamber noted that the effective cost of power for manufacturers, adding the cost of erratic and supplemented power to the base cost, is very high vis-à-vis their counterparts in China, Thailand, and Indonesia.

The chamber highlighted the latest World Bank Indices of Doing Business 2007 that says that cost associated with all the procedures required to export in India is $864 per container vis-à-vis $335 per container in China. Similarly, cost associated with all the procedures required to import in India is $1,244 per container vis-à-vis $375 in China.

Labour laws

Restrictive labour laws impact the competitiveness and growth of the manufacturing sector. There are 154 laws, related directly or indirectly to labour, which are to be complied with by the manufacturers, according to the chamber.

Besides addressing these macro-policy issues, the Government also need to address sector specific issues relating to leather, textiles, metal products and parts, electronics, food processing.

The chamber said manufacturing could witness the growth rate of over 14 per cent per annum.