New Delhi, Feb. 27: The government plans to focus on a six-point initiative to revive industry, which witnessed a weak growth of 2.7 per cent during 2001-02.
The Economic Survey has suggested continued progress on infrastructure, movement towards low and uniform customs tariff, move towards value added tax (VAT), reform of labour laws, elimination of small scale sector reservations and a framework for swift resolution of failure, including rapid winding up of failed companies and sound enforcement of creditors’ rights.
The government believes these measures will foster productivity and industrial growth. “A strong surge of export-led growth in labour-intensive manufacturing could come about if key policy ingredients are put into place,” says the Survey.
It has suggested the adoption of measures that led to growth in manufacturing exports in recent years and in creating a new breed of firms that are able to successfully operate in international markets.
It has pointed out: “Software exports have grown at a compounded growth rate of over 50 per cent per year for the last five years. Hardware exports have also grown sharply in 2000-01 and 2001-02, reaching a level of Rs 5,871 crore in 2001-02 showing a growth of 22.6 per cent over the previous year.”
The Survey has also suggested the need to focus on food processing sector. It says that in order to obtain higher value from agriculture, there is a need for a sophisticated food processing industry, which is able to efficiently perform storage, transport, and processing functions from the farm-gate to the end-customer.
At the start of the reform process, there were many concerns about the ability of Indian firms to operate in a competitive environment without trade barriers or entry barriers.
However, “Indian firms have now successfully globalised themselves and embedded themselves into performing labour intensive functions in the global production chains,” says the Survey.
“India has undeniably emerged as a success in the export services based on India’s strengths in higher education and access to low cost manpower,” adds the Survey.