May 17 (Punjab Khabarnama) : Finance Minister Nirmala Sitharaman on Friday said the country needs to boost its manufacturing sector to increase its share in the global value chain and become self-reliant. Addressing leaders of Indian industry at the CII Annual Business Summit, the Minister also underlined the need to achieve greater sophistication in product formulation and policy support.
Sitharaman said, “I want to underline something contrary to the advice given by some economists that India should no longer focus on manufacturing or should not accelerate manufacturing…. I want to emphasize the fact that there should be an increase in manufacturing. India should also increase its (manufacturing) share in the global value chain with the help of policies.” Some economists, including former Reserve Bank of India (RBI) Governor Raghuram Rajan, have expressed the view that India should focus on the services sector rather than manufacturing. Should be focused because he has missed that opportunity. He says China’s manufacturing-led growth model can no longer be replicated.
However, Sitharaman said expansion of manufacturing would help India become self-reliant. He expressed hope that India still has an opportunity to increase its manufacturing capacity as the world is focusing on the ‘China Plus One’ strategy after the Covid-19 global pandemic. Citing a report released in May by ‘Capgemini Research Institute’ He said India tops the list of investment destinations for senior executives in Europe and the US who want to reduce their dependence on China and shift some of their manufacturing capacity to emerging markets.
Of the nearly 760 executives surveyed, 65 percent said they plan to significantly increase investment in India. He said, “This in itself provides a huge scope to our Indian industry. PLI (Production Linked Incentive) schemes are also bringing changes in the mobile and electronics sectors.” He said that from 78 per cent import dependence in 2014, today 99 per cent of mobiles sold in India are made in India. Citing an example, Sitharaman said India became Apple’s second-largest manufacturing hub for iPhones outside China last year with exports worth US$1.1 billion.
On the services sector, he said India accounts for more than 50 per cent of the world’s Global Centers of Competence (GCC) and remains the most preferred destination generating significant domestic and global opportunities. The number of GCCs in India currently exceeds 1,580. The minister said that the government led by Prime Minister Narendra Modi sees the private sector as a partner in India’s growth. He said, “We see a very big role for the private sector. We would like to partner with them in growth. The government will act as a facilitator and supporter.
