Industrial growth to continue: Rangarajan

The current phase of industrial expansion was expected to continue longer, according to C Rangarajan, Chairman of the Prime Minister's Economic Advisory Council.

He added that there was a need for roadmaps to improve firm productivity, efficiency and export potential of firms in different segments of the economy.

"The post-liberalisation phase in India was marked by three phases. The first, of rapid expansion from June 1993 to August 1996, followed by a slowdown and further rapid growth May 2002 onwards," he said while speaking at the release function of a book dedicated to K L Krishna, one of the stalwarts of the Delhi School of Economics.

The function was organised by the Rajiv Gandhi Institute for Contemporary Studies and Academic Foundation.

The first phase lasted around 37 months and the second phase was into its 34th month, Rangarajan said, adding that, "I have reason to believe that this expansionary phase will continue longer."

This time, growth was low, but more widespread and the manufacturing sector was more mature and constraints like infrastructure and low spending on R&D were problems, he said.

Speaking on the occasion, DSE professor Suresh Tendulkar said the contribution of industry to gross domestic product had not risen significantly.

"With two-third of the workforce having education of less than four years, it can only be absorbed productively in manufacturing sector," he said.

He added that the sector had not developed well because of infrastructure constraints and institutional rigidities including labour laws, bankruptcy legislations and lack of reforms in the public sector. Speaking on the occasion, Planning Commission Deputy Chairman, Montek Singh Ahluwalia, said a double digit industrial growth was required to increase the economic growth rate.