Manufacturing sector’s contribution to GDP needs to increase: FM

Puducherry: India needs to register an increase in manufacturing contribution to GDP, Union finance minister Nirmala Sitharaman said here on Sunday.
Delivering the keynote speech at the Pondicherry Literature Festival, she said "Manufacturing has to be diversified ... otherwise we will largely rely only on services. So we will give a lot of attention to it."
Of particular interest is the electric vehicle segment."We believe the future of public and personal transport will be EVs so policy support and infrastructure support is something we are working on," she added.
The manufacturing focus is also behind the govt's push for semi-conductor investments and the various PLI schemes. "India's demand for semi-conductors is projected to grow fivefold to around $110 billion from the current $24 billion. It is that demand for which we need to have more semi-conductor manufacturing happening in India." The five proposals that have come to India will mean around 1.52 lakh crore investments "are likely to happen which are all grounded," she said.
The investments are also linked to energy security. Reduction of duties on critical minerals will help ensure "good supply of critical minerals needed for storage battery capacity, renewable energy capacity etc," she said. "Bharat Small Reactors will build smaller scale nuclear energy for improved energy security."
The manufacturing focus is already showing with electronic exports quadrupling since 2014. In 2014 it was $7.6 billion but today it is $29.12 billion which, she said, could not have happened if policy was not "an enabler". Similarly, smartphone production has gone from 1,556 crore in 2014 to 1.2 lakh crore while mobile phone production has gone from 18,9 00 crore to 410,000 crore today. Defence exports have increased 30 times from 686 crore in 2014 to 21,038 crore now. With all this "there is a lot of infrastructure investment that the govt will spend on," she said.
On the macro front, macro-economic stability has to be maintained. "It is because of that FDI flows keep coming and this is what keeps our economy moving forward when very many developed countries are struggling," she said. That includes low inflation, lesser fiscal deficit and narrowing the current account deficit. "This can be managed with continuous stress on investment particularly in asset building, more and more innovation including more patent registration, more inclusion (financial inclusion and targeted welfare delivery) and more infrastructure," she said. "Convergence between govts both state and central, collaboration between civil society and govt and competition" is the way ahead, she said.