‘Make for India’ will boost the economy: OECD economist

Our Bureau Ahmedabad | Updated on February 19, 2015 Published on February 19, 2015

Prime Minister Narendra Modi’s ‘Make in India’ programme should also focus on making ‘for India’, said economists from the Organisation for Economic Cooperation and Development (OECD). This will encourage businesses that cater to the local market and boost the economy.

“India is a huge and diverse market. So, firms here should have a comparative advantage of serving the Indian market. Creating special zones, free trade zones to promote exports is good for the short run but that will create a dual economy. That is the wrong direction to go,” said Catherine Mann, OECD Chief economist, after a seminar on the 3rd OECD Economic Survey of India at the Indian Institute of Management (IIM-A) here.

Mann further said there was a large domestic market of willing buyers in India, and Indian firms should be serving it. “So, Make In India for India should be the direction to go,” she told mediapersons.

OECD suggested several recommendations to boost the manufacturing sector in the country. Isabelle Joumard, OECD Head of India Desk, stressed on the need to make labour laws more flexible so that they do not discriminate by the size of enterprises.

“There is a need for better and earlier vocational training besides pushing up the infrastructure sector with implementation of single-window clearance,” she said, adding that the economy needs to be opened up further to improve the business environment and streamline the tax regime.

On the investment environment, Mann said India has seen insufficient investments in the past decade similar to the US or Europe.

“The one fallout of the financial crisis has been a severe risk aversion on the part of the private sector. It is also the case with governments in general. There has not been sufficient infrastructure investment, private business investment. So, currently, India faces the same challenges as it did in the past.”

However, she expressed optimism about the new government being “business-friendly”.

Published on February 19, 2015
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