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30 million new jobs possible by 2015!
October 09, 2004 07:11 IST
Indian manufacturing exports could touch $300 billion and create about 25-30 million new jobs by 2015, global consultancy firm McKinsey said.
"If India were to take advantage of the global trend to manufacture and source products in low cost countries (LCCs), manufacturing exports from the country could increase to $300 billion by 2015, leading to approximately 3.5 per cent share in the world manufacturing trade," a CII-McKinsey report on manufacturing said.
Along with the robust domestic demand growth, it would add one per cent of India's annual GDP growth, creating 25-30 million new jobs in ms more in the allied sectors including construction, education and entertainment due to multiplier effect.
Majority of the growth would come from incremental outsourcing and the country needed to focus on other sectors such as speciality chemicals and auto components and electrical and electronics products along with gems and jewellery, textiles and apparels.
It said the growth cannot happen unless the domestic manufacturing gross output grows to $1,100 billion from the present $320 billion.
The report said the government needs to remove the barriers if it has to achieve such huge export led growth.
The government should stimulate the domestic demand by reducing indirect taxes and import duties, build ports infrastructure, accelerate power reforms and encourage development of manufacturing clusters such as the special economic zones.
To make Indian manufacturers globally competitive, the government should allow the use of contract labour for all activities, repeal section 5B of the Industrial Disputes Act and minismise the number of onerous inspections, it added.
Speaking to newspersons after the release of report at the CII manufacturing summit, McKinsey India head Ranjit Pandit pitched for unified tax regime which, he said, would spur a wave of growth in the manufacturing sector.
The government should replace all indirect taxes on goods such as excise, state and central sales tax, octroi and entry tax with a single nationwide VAT, he said.It should also reduce tax levels to 15 per cent the current 25-30 per cent of the retail price and duties similar on all imports to a single rate of ten per cent by 2007, Pandit said.