“Manufacturing sector growth needs to increase to ~2-4% more than GDP growth for it to become the Growth Engine of the economy” – Mr Arun Maira
Addressing the 11th edition of CII’s Manufacturing Summit on the second day with the theme ‘Re-igniting India’s Quest for Manufacturing Leadership’, Mr Arun Maira, Member, Planning Commission asserted that the manufacturing sector in the country must play a much bigger role in growth and employment than what has been undertaken so far. He mentioned that in order to reach the target of 100 million jobs by 2025 in the manufacturing sector, we must increase our depth in manufacturing and also encourage institutional and stakeholder collaboration, coordination, and consultation which would lead to implementation. He said “A single point plan that the country now needs is Implementation.” He stated that we recognize clearly that action is required at the state level and must therefore work towards fine tuning administration and regulation in the states.
On the National Manufacturing Plan (NMP), Mr Maira mentioned the 12th Five Year Plan was for the first time developed in consultation with civil society organizations, business associations, etc. He added that NIMZs are just one element of the NMP and apart from job creation the Plan focuses on the need to increase “depth” in manufacturing via the level of domestic value addition, enhance global competitiveness through policy support and ensure sustainability of growth. He highlighted that the Plan also envisages increasing manufacturing sector growth to around 2-4% more than GDP growth and making the sector the growth engine of the economy. Increase in the country’s manufacturing depth, competitiveness and job creation will result in the growth of the sector’s contribution to ~25% of GDP by 2025, he added. Mr Maira also mentioned that in order to improve the quality of coordination and implementation of the Plan, they have constituted the Indian Backbone Implementation Network (IBIN).
On the topic of human resources, Mr Maira stated that the labour laws in the country must be changed, as they are old and badly administered. However new labour laws need to be developed out of a consensus and collaboration between industry, workforce and policymakers, he asserted. Mr Maira said, “Human Resource Development is the key to improving manufacturing competitiveness, as it plays a major role in your ability to learn faster than your competitors.” He added that sectors such as the food processing sector and light engineering are capable of creating jobs in the economy if a cluster approach is followed.
Mr Maira concluded by emphasizing that the role of the state is only as a ‘facilitator’ to industrial eco-system growth and not the ‘doer’; this is where industry needs to take the lead.
One of the Panel Discussions at the Summit focused on addressing the issue of “Competitive Advantage of Indian Manufacturing”. Addressing the topic, Mr Sumit Banerjee, Chairman, CII Cement Industry, Division and Vice Chairman, Reliance Cements Pvt Ltd mentioned that India has a strong competitive advantage in its large and growing domestic market, its geographical location, huge natural resources, and demographic advantage. Mr Ranjeet Dalvi, Executive Vice President – Strategy & Business Excellence, Siemens Ltd stated that product design makes the product more competitive and he has witnessed how localization and design can reduce costs by around 50-60%. He also said there is a need to build ‘Brand India’ in manufacturing so that it can come to stand for high quality. In the same context Mr Dalvi mentioned the need to create a culture of quality in the country. In his address, Mr Janmejaya Sinha, Chairman, Asia Pacific, BCG highlighted the immense opportunity in India and said that this opportunity is going nowhere and we must invest because that is how we would win in manufacturing.
Mumbai, 18th December 2012