As per official data released yesterday, India's economic growth dipped in the January-March quarter to 6.1 per cent.
India’s manufacturing sector needs to grow at 12-14 per cent for the country’s overall growth rate to touch 8 per cent, NITI Aayog member V K Saraswat said today. Speaking a seminar on modernisation of Indian Navy, the former DRDO chief said the country’s current share of Gross domestic product (GDP) expenditure for research in the defence sector was inadequate.
“If we have to touch the overall GDP growth of eight per cent, we need to have manufacturing growth at almost 12-14 per cent compound annual growth rate (CAGR),” he said.
As per official data released yesterday, India’s economic growth dipped in the January-March quarter to 6.1 per cent. The growth of manufacturing sector was recorded at 7.9 per cent in 2016-17. Saraswat said India intended to achieve a 25 per cent contribution by the manufacturing sector to its GDP by 2022. In 2015, the manufacturing sector’s contribution to the GDP was 15 per cent — almost USD 270 billion in a GDP of USD 1.8 trillion.
“We expect that the GDP grow to almost USD 2.7 trillion to USD 3 trillion by 2022, so the manufacturing contribution to the GDP will be almost 25 per cent. We are thus aiming at USD 670 billion, almost adding about 100 million jobs in that direction,” he said. Citing the cutting-edge developments in defence sector globally, Saraswat said India could not omit the defence and aerospace sectors if it intended to inject a higher level of input from the manufacturing sector to its economy.
He said there were opportunities galore, especially in Micro, Small and Medium Enterprises (MSMEs), to innovate, saying the ‘Make in India’ initiative was aimed at increasing indigenous defence manufacturing and becoming self-reliant. “There is a tremendous amount of push under the Make in India programme. I think that’s the opportunity which will lead us to world-class defence manufacturing,” he said.
“When you look at the opportunities in the next five years, that means businesses worth almost USD 150 billion dollar are available and those who are really trying to step up in this direction, will become a part of the Make in India programme in a big way,” he added. Saraswat said the country needed to pump in more investments in research and development to compete with global giants in defence. “We are still spending 0.9 per cent of the GDP in research and development (R&D) and if we compare to the top five (defence spenders in world), we are way down,” he said.
President and MD of Airbus Group India Pierre de Bausset, who also attended the event, congratulated the government for the rollout of the much-awaited strategic partnership (SP) model for defence production. Under the policy, select private firms will be roped in to build military platforms such as submarines and fighter jets in India in partnership with foreign entities. “It actually revives our enthusiasm and our trust that defence procurement can accelerate and investment in an efficient defence industrial way can gain pace and that the government has considered incentives for the Indian private players to take long-term risk and to meet sustainable success,” he said.
“That is the recipe for self-reliance in defence for this country,” he added. Even then, original equipment manufacturers (OEM) like Airbus would be concerned about fine-prints, such as management control in the SP model, de Bausset said.