For the first time in decades, India is set to have a comprehensive policy to promote manufacturing. A committee headed by National Manufacturing Competitiveness Council (NMCC) chairman V Krishnamurthy has called for the creation of a body to monitor issues related to the sector.
The committee submitted its report to Prime Minister Manmohan Singh today.
The report comes at a time when the Indian manufacturing sector, which has a share of over 17 per cent in the country’s GDP, is going through a rough patch.
“The report recommends putting in place a manufacturing policy. The policy would ensure focused attention by the government to various aspects, which would enable it to achieve the goals of manufacturing and employment generation,” an NMCC statement said today.
Currently, there is no manufacturing policy that governs the sector. The NMCC had prepared a National Strategy for Manufacturing in 2006.
The report also calls for setting up of a permanent body to monitor developments in the sector and recommend suitable policy actions, in line with the proposed manufacturing policy.
The other recommendations of the group include directing macroeconomic policies, like those on taxation, trade, technology and FDI, towards promoting the manufacturing sector.
Moreover, the group has also suggested specific policy interventions for employment intensive and strategic manufacturing industries. These include textiles, leather, aviation as well as defence-related industries.
The NMCC has been maintaining that in the past 20 years, the growth of the manufacturing sector has been stagnating at around 7 per cent. “In order to achieve an average economic growth rate of 9 to 10 per cent in the medium to long term, the manufacturing sector needs to grow at about 12 to 14 per cent. Such growth is also required from the point of view of absorbing the surplus workforce now dependent on the rural sector,” the NMCC release said.
The PM had constituted this group in early 2008, to suggest both short-term and long-term measures to deal with the ailing manufacturing sector. Members of the group include secretaries to the finance ministry as well as Departments of Revenue, Commerce, Industrial Policy and Promotion, and Textiles.
