Budget focuses on manufacturing, infrastructure, urbanisation – the Key Drivers of Growth

New Delhi, July 16 : Elaborating on the Union Budget 2014-15,Amitabh Kant, Secretary,DIPP, Ministry of Industry said that manufacturing, infrastructure and urbanisation – which are the most important and key drivers of economic growth – were the prime focus of the budget.

He emphasised that no country in the world has grown and created jobs without having a manufacturing base. India needs 1.5 million jobs per month – to create 18-19 million jobs per year manufacturing needs to grow by 10-11% per annum. He felt that India has started premature de-industrialization and there was a dire need for India to get manufacturing back on track.

Reduction in threshold limit for investment allowance, predictability in taxation policy, FDI in defence and insurance up to 49%, permission of 100% FDI in construction and reduction of threshold limit in built up area for FDI, introduction of E-business portal and several measures such as an advisory from Central government to all departments and state governments with regard to self certification, one register for all purposes, etc are testimony of government’s commitment to revive manufacturing sector in India.

Kant reassured the industry that government is committed to correct the inverted duty structure and few steps have been taken in this budget which are likely to provide positive impetus. He felt that FTA has also impacted the manufacturing sector in India and government is looking at measures such as deemed export status to compensate / promote domestic manufacturing. Acknowledging constraints, he stated that Land acquisition and labour laws are two areas where India needs to do a lot. He appealed the industry to identify 5-6 sectors where India can emerge as world leader in the manufacturing.

One of the most innovative and promising steps that this budget has announced is allocation of Rs 10000 crore for entrepreneurship development. This is based on the model tried in Israel and would work like a venture capital fund to help almost 1 million start-ups in the country. On infrastructure front, Kant said that the relaxation on SLR / CRR announced in the budget is likely to help increase the funds availability for infrastructure projects.

However he felt that Project Development is the key where government takes all the clearances and infra companies just focus on construction and development aspects. The budget has laid a special focus on industrial corridors and dedicated freight corridors to provide world class infrastructure, ultimately helping manufacturing in the country.

While every minute 30 Indians will move from rural areas to urban cities for the next 20 years, India is hugely lacking in approach in building or upgrading its city infrastructure. This budget has taken a huge stride in terms of laying a focus on city development andurbanisation, Kant asserted. India’ s aim to build 100 smart new cities will help India urbanise to meet the growing needs. Given that it was just 45 days to prepare for this budget, Amitabh Kant concluded that the Government has done a commendable job, laying and providing a sound foundation and a direction for growth, at the same time keeping the fiscal deficit target to 4.1 percent.