Moneycontrol
Nov 30, 2016 08:57 AM IST IST | Source: PTI

'Interest costs must moderate to make India manufacturing hub'

Exuding hope that the interest rates will come down soon, Jindal said, "At present, inflation is low and banks are plush with funds, making a case for lowering interest rates.


Reduction in cost of manufacturing, including interest (or capital) cost is critical for making India a global manufacturing hub, JSW Group Chairman and MD Sajjan Jindal said.


Exuding hope that the interest rates will come down soon, Jindal said, "At present, inflation is low and banks are plush with funds, making a case for lowering interest rates.


Manufacturers need cost of capital to come down to become competitive. We have to fix this problem first" "The manufacturing sector should also develop an ecosystem ensuring high competitiveness of manufacturers, while adding that value addition and research and development support was also very important for the success of manufacturing sector," he said while speaking at the CII Manufacturing Summit organised by Confederation of Indian Industry.


Referring to the government's aim of increasing the share of manufacturing sector to 25 per cent of the economy, he said to achieve this target, Indian manufacturing should grow at 12 per cent per annum in the next 6-7 years.


Commenting on the impact of demonetisation on the industry, Jindal said it is a short term pain but the country will gain in the long run.


"Prime Minister Narendra Modi is doing a tough job to switch parallel economy to digital economy. We see challenges, but organised sector across the country is shifting towards digital economy," he said.

Inaugurating the conference, Ajay Shankar, chairman, Expert Committee on Regulatory Approvals, Department of Industrial Policy and Promotion said, "Not interest cost alone, but all other associated costs like cost of land, cost of clearances etc, also should come down, and a good leasing industry should be developed for facilitating capital goods availability to make India a manufacturing hub of the world."

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