'Leadership deficit' hurting employment in manufacturing, says RBI's H R Khan
11 Aug 2012
Reserve Bank deputy governor H R Khan yesterday said "leadership deficit" was one of the reasons that hampered growth in the employment-friendly manufacturing sector.
"Everybody is talking of a leadership deficit...We have the right type of entrepreneurs, the right type of aptitude, but the leadership deficit is the No 1 factor," Khan said at a Federal Bank event in Mumbai.
"We are in a very difficult phase of our economic history. We are passing through tough times," he said.
He added another factor holding back the progress of the nation was the lack of vibrancy in the manufacturing sector, where the country was targeting creation of 100 million jobs by 2022, as part of the National Manufacturing Policy.
Index of Industrial Production (IIP) was down by 1.8 per cent in June this year against 9.5 per cent in the same month last year.
"We have a legal deficit in terms of contracts, in terms of policies ... Suppose a company is not doing well, there should be a smooth path for liquidation," Khan said.
Citing problems in fuel linkages for the power sector and other issues related to infrastructure as factors hurting manufacturing growth, he pointed to land acquisition, learning or skill-sets and labour as other difficulties that needed to be sorted out.
Khan's list of deficits ended with liquidity, about which the RBI said, it would do everything possible to maintain a steady flow of credit to the productive sector.
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