In what seemed to be a veiled response to Raghuram Rajan's recent comments, Finance Minister Nirmala Sitharaman emphasised on the need to focus on increasing India's share of manufacturing in global value chains with the help of appropriate policies.
Speaking at the Confederation of Indian Industry (CII) Annual Business Summit, Sitharaman said that "manufacturing must increase."
Her comments follow former Reserve Bank of India (RBI) governor Rajan's scepticism about India’s focus on certain high-profile manufacturing sectors, such as semiconductor production, without addressing fundamental issues such as education.
To be sure, Rajan has now clarified he is not against manufacturing in India, but is concerned about heavy subsidies to big firms under the production-linked incentive scheme and incentives for chip manufacturers.
"We need to have greater sophistication in product making and also see how best it can be given policy support," Sitharaman said, adding that expanding manufacturing will also help India achieve its goal to be a self-reliant economy.
Highlighting the success of the PLI scheme, the finance minister said that in the telecom sector it has helped India achieve import substitution to the tune of 60 percent.
FM Sitharaman On Private Participation
PM Modi looks at private sector as a partner to develop India. We see a very big role for the private sector in our goal of becoming a developed country by 2047 with government acting as a facilitator and enabler.
FM On the Demographic Dividend
The window of India's demographic dividend will be there for the next 30 years with a historically lowest dependency ratio.
India's demographic dividend not only gives us skilled workers, but areas of skilling including AI and deep data is being identified and ramped up in India so that the demographic dividend which will persist for the next 30 years will help growth.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
