Monday, September 01, 2014: Indian manufacturing sector is set for a huge boom as the government has announced FDI (foreign direct investment) in major sectors like defence and railways. The government has also decided to set up eight electronics manufacturing units and seven electronic manufacturing clusters across the country. These manufacturing boom will help India in less dependence on imports and the trade deficit can also be checked.
Last month in his first Budget speech Finance minister Arun Jaitley announced reduction in customs duty on products like oil, coal tar, electronics and more so that domestic production gets more encouragement. The new government has total focus on India’s manufacturing future and in the process employment opportunities will also be generated for the youth. Growth in manufacturing sector will contribute to India’s GDP, resulting in inclusive growth and development of the country.
The Union government has also given approval to an increase in the composite cap of FDI in defence to 49 per cent and 100 per cent in railways infrastructure. Indian electronic manufacturers will also get incentives from the government, as per eligibility under the changed Special Incentive Pachake scheme. The industry has welcomed all these measures whole-heartedly which will hopefully revive the country’s degrading economy. Chief economist of Crisil, DK Joshi, said, “There are very limited policy tools available with the government except introducing some reforms at this point of time. There will be a gradual and mild positive effect of these measures on the growth of manufacturing in the country.” Moreover, the new land Acquisition Act also requires faster action for greenfield expansion.
The FM has though not said a word about the demand regarding dividend distribution tax and minimum alternate tax. So exporters are waiting for the trade policy which is expected to be announced by this month end. A senior official of the Federation of Indian Exports Organisation said, on condition of anonymity, “There is no significant announcement to boost exports despite the fact that there are slippages in export targets because of the sluggish global economy. We only hope something concrete comes up in the foreign trade policy.”
