Union minister of commerce and industry Kamal Nath has said that the promotion of small and medium enterprises (SMEs) is crucial to India's growth and for addressing issues of poverty and unemployment.
While addressing the TiE Entrepreneurial Summit 2007, in New Delhi today, he stressed that the entrepreneurship was critical for increasing competitiveness as new services, products, processes and innovations increase efficiency, thereby improving the competitive strength of the economy as a whole.
Nath said, ''We are extremely fortunate in India that people here have an abundance of entrepreneurial spirit. India has been relatively successful in creating a policy environment that takes advantage of this intangible, yet vital, asset. Entrepreneurs have emerged as the engine of economic and social development throughout the world- by generating employment, growth and international competitiveness''.
Elaborating on the role played by entrepreneurs Nath observed that industry has been one of the major drivers of the growth of the Indian economy. The last four years have witnessed impressive rates of industrial growth averaging around 10 per cent. In 2006-07, the industrial growth was quite impressive at 11.5 per cent, while the rate of growth of manufacturing was even higher at 12.5 per cent.
This has resulted in FDI inflows to India growing at a fast rate. Compared to $5.5 billion in 2005-06, FDI inflows reached $15.5 billion during 2006-07 which corresponds to an increase of 185 per cent, he further added.
Earlier while addressing the CEOs at the breakfast session ''Doing Business in India'', the minister said that for the past three years, India has been clocking an 8 per cent plus growth. In 2006-07, this rate of growth was 9.4 per cent. The 11th Five-year plan has set up a target of 9 per cent growth. Savings, which are about 30 per cent of GDP are estimated to grow to 35 per cent. Similarly, gross capital formation is likely to touch 37.5 per cent. It is expected that the private sector will be predominant in capital formation.
Nath informed the entrepreneurs that the business climate of India could be judged from the fact that the country is considered amongst the top three investment destinations. Continuous reforms in investment policies have resulted in India practicing one of the most liberal policy regime.
Almost all sectors have thrown open to FDI with no requirement of prior approvals, and that for the past three years the tax structures had been lowered.
He also added, ''Though, we have made important strides, there are still some development challenges. We need to take the benefit of globalization and reforms to the poorest of the poor. We need to work more on governance infrastructure, business climate, skill development, environment and equality of growth''.
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