A strong manufacturing sector is core to any nation’s economic growth. For India to achieve sustained growth, a key agenda of the current government, addressing the challenges of the manufacturing sector is of utmost importance. On the policy front, though several initiatives have been introduced in the last five years, to realise its full potential, further actions are required.
The industry is hopeful that the upcoming Union Budget will provide the necessary fillip in this direction. Though the much-awaited “New Industrial Policy” is likely to address the sector concerns, it is imperative that the budget provisions include a mechanism for offsetting disabilities related to high cost of finance, power and logistics, cost and ease of doing business, and velocity of business. We are hopeful that the budget would consider tax and other fiscal incentives to boost investment in R&D like providing tax benefits on R&D expenditure of up to 200 per cent for the next five years. Tax holidays for the promotion of high-tech industries should also be introduced.
Further, a holistic approach towards the manufacturing of intermediate goods would be welcomed to help strengthen domestic supply chains and the sector’s competitiveness. More plug and play facilities would encourage MSMEs and foreign players to reduce set-up time. There is also a need for selecting National Champion Companies, that will help Indian brands grow globally, along with a full-fledged campaign to make Indian brands more aspirational and highly sought after. To help achieve scale of productions and make products contemporary in global markets, export will be an integral part of all businesses. Government support is required to make exports competitive, create export markets and attract global players towards India.
With these measures in place, the industry is hopeful that India will not only achieve the set target of $1 trillion manufacturing but will surpass it.
The writer is chairman of CII Manufacturing Council and MD of Mahindra and Mahindra Ltd...