INDUSTRY POISED FOR ERA OF SUSTAINED HIGH GROWTH
JAITLEY PRESIDES OVER PARLIAMENTARY CONSULTATIVE COMMITTEE OF COMMERCE & INDUSTRY
Date : 18 Dec 2003
Location : New Delhi
Indian economy is poised to grow at over 7% in terms of real GDP during 2003-04, with industrial growth and manufacturing growth, in particular, having reached a stage where all the ingredients are in place to trigger an era of sustained high growth. The overall investment climate today is conducive to promoting growth and investment in industry as reflected in buoyant investment indicators. This was indicated in a presentation on the "Present Industrial Scenario" at a meeting of the Parliamentary Consultative Committee of the Ministry of Commerce & Industry, which was presided over by Shri Arun Jaitley, Union Minister of Commerce & Industry and attended by Shri Suresh P. Prabhu, MP (Shiv Sena); Shri Kapil Sibal, MP (INC); Shri M. Master Mathan, MP (BJP); and others. Shri Dipak Chatterjee, Commerce Secretary and Shri Lakshmi Chand, Secretary (Industrial Policy & Promotion) were present.
On the external front, the country’s foreign exchange reserves continue to surge and have now exceeded US $ 96 billion. Healthy growth in imports may also have a favourable impact on industry in the coming months, while surge in non-oil imports (in April-October 2003) reflects strengthening of domestic demand. Over the same period, export growth in dollar terms has been sustained, although at a slower pace compared to high base of the previous year. However, improved prospects for global recovery should provide a fresh impetus to export growth, it was indicated.
Members present stressed the need to increase the share of manufacturing in GDP to generate greater employment opportunities, especially in rural areas. Apart from the contribution of services to GDP and its expanding growth in the country’s overall growth process, it was mentioned that employment generation would come essentially through the manufacturing, mining and construction sectors. Fortunately, construction activity was looking up as also steel and cement and these were positive signals. The importance of manufacturing was brought out in the presentation which said that in India it currently accounted for about 17% of real (measured) GDP, 12% of the total workforce and 24% of the total workforce engaged in the organised sector, and little less than three-fourth of India’s total merchandise exports. "The combination of low inflation, low interest rates, tax buoyancy and the revival of public spending on infrastructure together signal a very high likelihood of a significant acceleration in overall growth and industrial growth, in particular", it said.
The discussions also briefly touched upon the performance and progress of Special Economic Zones (SEZs) in the country. It was mentioned that SEZs in the first six months of the current financial year (April-September 2003) registered an export growth of 23% as against around 10% for the non-SEZ sector. Members emphasised the need for having the SEZ Act in place early, as a proper regulatory framework was needed to attract investment in the zones and facilitate faster implementation of the SEZ scheme.