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Rediff.com  » Business » Focus on industry must for 8% growth

Focus on industry must for 8% growth

By BS Economy Bureau in New Delhi
March 14, 2005 10:08 IST
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India will have to focus on setting up a strong manufacturing base to achieve a growth rate of over 8 per cent, as a strong presence in services alone will not be sufficient to sustain progress, United Nations Industrial Development Organisation Director-General Carlos Alferdo Magarinos has said.

"Manufacturing is the export driver, which has been responsible for spectacular economic growth in Southeast and East Asia, including China, in recent years. While India can be justly proud of its global achievements in software, it would be a mistake to believe the country can achieve a high rate of economic growth, over the coming decades only on its performance and achievements in the services sector," he said.

Speaking at a seminar on Business Partnership for Promoting Competitiveness, organised by the Federation of Indian Chambers of Commerce and Industry, Magarinos said the share of manufacturing in India's economy was quite low.

Manufacturing value addition as a share of the gross domestic product in 2001 was only 16 per cent, compared with 35 per cent in China and 22 per cent in the Philippines.

Quoting the Competitive Industrial Performance (CIP) index prepared by Unido, which compared the performance of 93 countries for the period 1980-2000, Magarinos said, India was ranked 38 in 1980, 36 in 1990 and had come down to 40 in 2000. China, on the other hand, was ranked 39 in 1980 and moved to 24 in 2000.

Magarinos also said trade and foreign direct investment were two areas where there was considerable scope for improvement in India.

He said Unido was looking at enhancing the portfolio for its various programmes in India from around $22 million at present to $100 million over the next three years.

Magarinos said UNIDO was keen to participate in programmes like Business Partnership under which technical assistance would be provided to agriculture and food processing and the paper and pulp industries.

The programme, which is being implemented jointly with FICCI and the department of industrial policy and promotion, will include setting up a technology centre for business partnership at FICCI.

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BS Economy Bureau in New Delhi
Source: source
 

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