The competitive nature of the Indian economy is strong enough to be withstand the fallout of the euro zone crisis and the global slowdown, according to National Manufacturing Competitiveness Council (NMCC) member secretary Ajay Shankar. India has effectively tackled the present crisis, and can achieve a target of 14% manufacturing growth envisaged in the national manufacturing policy, he tells Sanjay Jog. Excerpts:
Is the 14% manufacturing growth achievable by 2022, as envisaged in the National Manufacturing Policy, especially when the manufacturing sector is facing a fall in growth amid global slowdown?
It is quite correct that India is going through a downside business cycle due to the euro zone crisis and the global slowdown. During the 2008 crisis, the shock was sharper, but the recovery was quicker and better than expected. Thereafter, India could achieve 8 per cent plus growth rate. It is not easy to project any specific numbers if the international situation becomes worse.
In the current scenario, India continues to offer opportunities for investments at the global level. There is competitiveness in the economy -- and the industry scaling up operations can help achieve the target of 14% manufacturing growth in a sustainable manner. The government and industry need to work together. The competitive nature of the Indian economy has been strong; its fundamentals are quite strong. They have not been dampened by the current crisis.
There was a time when it was believed that India cannot do manufacturing. Now we have reached a stage where our National Manufacturing Policy talks about 12-14% growth rate, 100 million jobs and increasing the share of manufacturing in the GDP to 25% by 2025. If you look at the past, you see that we had touched 12-14% growth in a few short periods. The challenge is to make it steady and sustainable for 10 years. I think this is very much do-able. We have firms across spectrums that have proved to be globally competitive and serious. Higher aspirations by the government on this front is obvious.
What according to you are key features of the National Manufacturing Policy?
It is a bold and ambitious document and it can be a game-changer. Its part A talks about the government intentions, while B covers government decisions. It has been evolved through a comprehensive consultation process. The policy recognises that land is an issue, and hence the talks of making land banks.
The plan is to release these land banks with sick and unproductive units and use those for productive purposes, besides provide external facilities like infrastructure. The policy clearly spells the government’s move to unlock the value of land in possession of public undertakings. This is quite a crucial move. Besides, the mission is to establish national investment and manufacturing zone spread over 5,000 hectares where the government plans to provide funds for necessary surveys and reports.
These are huge clusters with progressive and industry-friendly policies such as reducing transaction costs by moving towards self-certification. Moreover, the policy talks about exempting an individual unit of environment clearances if such an approval has already been granted for a master plan at the macro level.
How will the green manufacturing play a crucial role in increasing the growth?
Many companies have started creating greener products which will have a positive impact on the environment. This will lead to efficient use of key resources and improve the operational efficiency and lower cost.
What is your view on lack of substantial public and private investments in India? Will the government need to take up this on a priority basis to boost the growth?
There is a need to give a necessary push for public and private investments in the country. Investments in infrastructure development will be crucial to achieve high growth rate.
