Manufacturing sector share in GDP seen rising to 20% soon
30 April 2018
The contribution of manufacturing sector to India’s gross national product (GDP) is expected to rise to levels around 20 per cent in the next few years, union minister for commerce and industry and civil aviation Suresh Prabhu has said.
The minister said the government is working with industry on identifying the new growth sectors and follow up with sector-wise action to achieve this. Stating that new industries will drive future growth, the minister said we need to focus on industries which are not even born today.
India is anticipated to become the fifth largest manufacturing country in the world by the end of the year 2020. The government has set up an aggressive aim of increasing the contribution of manufacturing output to 25 per cent of GDP by 2025
He said the service sector will continue to be a strong growth driver of the national economy while asserting that the government is working on increasing the productivity of the agriculture sector as well.
The minister was speaking at the inaugural session of the two-day India Economic Summit 2018, being organized by Bombay Stock Exchange, in Mumbai on Saturday.
Stating that the emergence and flowering of the vision of New India will require us to focus on the qualitative aspects, Prabhu said that the next wave of growth will happen due to a surge in Indian entrepreneurship. He also pointed to the need to work on improving the tax-GDP ratio.
Noting that the investment potential in India is huge and that foreign investors are very eager to invest in the country, the commerce minister said the government will soon announce a cargo policy.
On the huge trade deficit with China, Prabhu said new agreements signed with China will help in reducing it.
The commerce minister, meanwhile, said in future states will drive growth in future with districts facilitating it while the central government will give an umbrella cover for this growth.
Union minister of state for civil aviation Jayant Sinha said the Modi government is committed to creating a New India by 2022. He said that contrary to the conventional wisdom, the farm-to-factory model will not work for India. He said that given the serious natural resource challenges India faces, the country needs to focus instead on farm-to-frontier model of development for national growth, meaning that we need to focus on the most cutting-edge and frontier industries such as automobiles and telecom.
He said that if we compete and win in such industries, we will be able to leapfrog to productivity frontiers that will take us forward in a significant way. The minister said that India has already started to do this, citing the examples of two-wheelers and the mobile revolution. Highlighting the importance of leapfrogging and of being at the frontier, Sinha said India needs to be the leader in the drone ecosystem, so that we can go from auto-rickshaws to air-rickshaws.
He said that India needs to graduate to a middle-income country, for which there is a need to achieve a three-fold increase in per-capita GDP – from $1,800 to $5,400. He said that this is possible only by having a long-term GDP growth rate of 7 per cent over the next 20 years. He added that this is entirely within our capability, given our track record during the time since liberalisation.