India's manufacturing sector must grow substantially for 9-10 per cent GDP growth: ASSOCHAM-EY study
NEW DELHI: If India has to maintain a sustained gross domestic product (GDP) growth of 9-10 per cent per annum, it is crucial that the manufacturing sector grows steadily at 14-15 per cent per annum over the next three decades, a joint study has said.
The joint report by ASSOCHAM-EY stated that while the Goods and Services Tax (GST) has to a large extent addressed prevailing regulatory issues, states across India must individually look into bureaucratic obstacles along with other obstructive regulations and policies on priority, based on their own manufacturing goals.
"Manufacturing sector in each Indian state and union territory (UT) has the potential to grow either directly - by setting up new industries - or by creating ancillary facilities, infrastructure and necessary forward-backward linkages to existing ones," the study said.
It also noted that for states, the best way to grow is to focus on industries where a particular state has competitive edge over others in terms of raw material availability, demand, user industries, logistics and availability of skilled manpower, besides geographical location.
"Robust domestic demand, improved FDI (foreign direct investment), increase in exports, higher infrastructure spending and capital formation, supportive fiscal and monetary policies suggest India's manufacturing sector is headed for a robust growth," the report stated.
The study further said the government's Make in India initiative will help elevate country's manufacturing sector as it aims to increase share of manufacturing in the GDP to 25 per cent from current 16 per cent and to create 100 million new jobs by 2022.