Economy

Manufacturing sector should grow, contribute 25% to GDP: expert

LN Revathy Coimbatore | Updated on January 12, 2018 Published on January 02, 2017

The target under Make in India is to create 10 crore new jobs by 2020. This can be achieved only by taking the manufacturing sector’s growth to 25 per cent of the country’s GDP, said Jagat Shah, Head (Economic Development Agency), Cluster Pulse.

Speaking to select media here, Shah said the manufacturing sector’s growth, which stood at 9 per cent of India’s GDP in 1950-51, stagnated at 15 per cent level for over 2 decades. “In our analysis, even though we say there has been a 7-8 per cent growth, we view this as ‘jobless growth’ for, manufacturing as a percentile of GDP was not increasing.

“In the last two years, it has improved to 17.1 per cent and this is primarily due to the ‘Make in India’ drive. But we are still low compared to our neighbouring countries such as Thailand (where 35 per cent of GDP is from manufacturing), China (32 per cent), Phillippines (30 per cent) Indonesia (29 per cent). We have a long way to go,” he added.

He clarified that ‘Make in India’ is not about getting foreign companies or large corporates to set up business here. “Such companies cannot create jobs. Even in manufacturing, only the small and medium enterprises (SMEs) can create jobs.

“Again, surveys show that it has not been easy to do business in India. The Centre is taking all steps to address this by making the system transparent; and digitisation would be the way to go.”

That said, Shah pointed out that under the MUDRA Scheme, the total disbursement in the last 11 months touched a high of ₹1,41,000 crore to 3.2 crore individuals.

“The life of these 3.2 crore people is bound to change if they survive in business for 1,000 days,” he said and explained: “It is believed that if one survives for 1,000 days in business then they would not have to worry about the growth for the next 2 -3 decades.”

A task force is working to identify those SMEs that would make it, but it is still early days, he said in reply to a question.

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Published on January 02, 2017
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