Mumbai: The government will have to focus on improving the purchasing power of consumers across all sections because domestic demand will push up growth that is envisaged through the Make In India programme to generate employment for the 12 million people that enter the job market every year. Unlike exports which are primarily determined exogenously through external demand, components on domestic demand — are dependent on domestic income said Crisil in a study that looks at how the Make in India programme can generate mass employment.
The study says this will require policy measures that ensure distribution of income growth to all sections which will sustain domestic demand-led growth. Crisil suggests that measures like financial inclusion, education, fair property rights, and price stability can serve as catalyst in ensuring equitable growth.
This rules out subsidies which are a burden on the exchequer. However the agency adds that even if India wants to grow its manufacturing by catering to the domestic market, it must continue to focus on improving its manufacturing for exports. “The maximum possible growth for manufacturing sector can only be realised if it strikes a balance between export-led and domestic-demand led growth,” it said. Additionally Indian manufactured products will have to match global standards globally competitive standards, otherwise it would result in increasing imports.