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The Government plans to address labour issues, the infrastructure deficit and the high cost of capital soon to meet the “uphill tasks” of raising the share of manufacturing in GDP from 15 to 25 per cent, Finance Minister Arun Jaitley said here today.
“I still find in merchandise products, our cost of capital, our labour regime, our infrastructure, the improvements which are required in our trade facilitation — these still have to be assisted in order to bring down the prices of our manufactured products,” he said.
“And as part of the ‘Make in India’ campaign these are special areas which we will have to address and address very soon. We are in the process of doing so,” he said.
India is endeavouring to become a global manufacturing hub, he said at an event organised by Ministry of Commerce.
Noting that real job creation is in the manufacturing sector, he said: “That’s why one of our national challenges is that 15 per cent-odd share of manufacturing today has to be increased to 25 per cent. But that’s an uphill task and, therefore, that leaves us essentially with the services sector whose growth is a low hanging fruit in India.”
Services sector is an area where there is huge space to grow and India has potential to grow, he said.
“I have a lurking suspicion that the services sector would occupy about 60 per cent of the GDP space...this is one sector where Governmental interference is minimal,” he said.
The second aspect is that India has proved to be a competent services provider globally.
“Our success in IT and ITeS are well known... Several US Presidents have tried to impose restrictive regimes on outsourced services to save jobs in the US.
“But that indirectly translated in simple languages means that you are compelling US consumers to buy costlier services from within their own country when the same service is available almost in same real time at a fraction of that cost outside. These rules have substantially not succeeded,” he said.
Talking about the sunrise sector, the Finance Minister said India is beginning to create an impact in the pharma sector.
The other sectors which have potential for growth are healthcare, research and development, tourism and education.
“I think these are areas we need to be aggressive on,” he added.
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