The clarion of ‘Make in India’ laid the foundation for growth in Manufacturing. The sector has witnessed increased inflow of FDI since then; the sector is expecting more conducive tax structure and ‘Ease of Doing Business’ with the roll out of GST soon. Meanwhile, as a catalyst, the Union Budget 2017 has features in store for the manufacturing sector to provide it right impetus for continuous growth.
At the recent Vibrant Gujarat Summit, Prime Minister Narendra Modi announced India’s rise to be the sixth-largest manufacturing nation in the world, as opposed to being the ninth largest at the time when ‘Make in India’ programme was launched, back in 2014.
The government has set an ambitious target of increasing the manufacturing output from 16 per cent to 25 per cent of the GDP by 2025, which means a promising future for the manufacturing sector in India.
Gross domestic product (GDP) from manufacturing in India decreased to Rs 4,84,150 crore in the third quarter of 201617 from Rs 4,901,64 crore in the second quarter. GDP from manufacturing in India averaged Rs 4,13,621 crore from 2011 until 2016, reaching an all-time high of Rs 4,90,833 crore in the first quarter of 201617. This happened due to an enormous push by the government to open up the economy.
FDI in Manufacturing
FDI in manufacturing has increased from US$ 1.65 billion in 2014 to US$ 18.36 billion in 2016. And the sector has received FDI equity inflow worth US$ 16.13 billion during April-November period of the current fiscal registering 82 per cent growth in FDI inflow as compared to the corresponding period last fiscal when it attracted FDI worth US$ 8.85 billion.
Initiatives have been undertaken to alleviate the business environment from outdated policies and regulations, and to align with parameters of World Bank’s ‘Ease of Doing Business’ index. To promote foreign direct investment, government has put in place an investor-friendly policy, wherein except for a small negative list, most sectors are open for 100 per cent FDI under the automatic route.
“Further, the policy on FDI is reviewed on an ongoing basis, to ensure that India remains attractive and investor friendly destination,” Commerce and Industry Minister Smt. Nirmala Sitharaman said in recently in the Rajya Sabha.
This story is from the February 2017 edition of industrial business MART.
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This story is from the February 2017 edition of industrial business MART.
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