If India has to maintain a sustained 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, noted a recent ASSOCHAM-EY joint study.
The joint report 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 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,” noted the ASSOCHAM-EY study titled “Sustaining India’s growth by accelerating manufacturing.
” It also said 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,” said the report.