The Narendra Modi’s flagship ‘Make In India’ programme should place India on the global manufacturing map in coming years, with states taking right policy decisions to improve ease of doing business and attract investment, said a study released here on Tuesday.
The EY-Assocham report says that Indian states have been working towards improving the contribution of manufacturing sector in gross state domestic product (GSDP).
It attributes the acceleration in manufacturing growth to a robust domestic demand, improved foreign direct investment, uptick in exports, higher infrastructure spending and supportive fiscal and monetary policies.
One of the objectives of ‘Make in India’ is to increase this share to 25% and to create 100 million additional jobs in this sector. These efforts will help elevate India’s manufacturing sector, says the report, titled “Sustaining India’s growth by accelerating manufacturing”.
The report notes that ease of doing business rankings have encouraged states and Union Territories to take proactive measures in implementing reforms.
The findings also highlight that the manufacturing sector still faces certain challenges especially in areas such as infrastructure and skill development and stiff competition from other emerging nations.
GST has to a large extent addressed the prevailing regulatory issues. Other obstructing regulations and policies, besides bureaucratic obstacles should be looked into by individual states on priority based on their own manufacturing goals, the report says.
The report was launched at the Assocham Manufacturing Conference cum Awards – Transform and Perform. It highlights the comparative advantages of several states, their potential strengths and the Centre’s policy initiatives gauged through the ease of doing business environment.
Amit Khandelwal, Partner and Leader- Transaction Advisory Services, EY India, says, “The manufacturing sector in India holds immense potential, with many states demonstrating high capacity and capability to augment India’s performance on the global manufacturing scale.” .
“India’s economy is currently the fastest growing major economy in the world. Moreover, initiatives such as ‘Make in India’ should be able to place India on the global manufacturing map in coming years,” he added.