Keeping with the overall tenor of the Economic Survey 2013-14 on reforms, the section on industry argues that the downturn now is an opportunity to push ahead with “critical reforms and remove infrastructure bottlenecks”. Some of the issues that need urgent attention are augmenting coal production, permitting commercial coal mining, restructuring power distribution, upgrading road and rail networks, reducing delays in regulatory approvals and land acquisition and rehabilitation.
The near-term industrial upturn is conditional on continued improvements in the policy environment and a quick return to peak investment rates, says the Survey.
The policy focus needs to be on the key growth driver in the short-term which is revival of private corporate investment. Once the overall macro-economic environment improves, industry would revive and growth can accelerate over the next two years, the Survey reckons.
The challenge for Indian manufacturing would be to move from lower to high-tech sectors, from lower to higher value-added sectors and from lower to higher productivity sectors, according to the Survey.
It points out that to push manufacturing to 25 per cent of GDP (from 14.9 per cent now), it is necessary to capture the global market in sectors showing a rising trend in demand.
The policy thrust should be on pushing up the level of public and private expenditure on technology upgradation, R&D, innovation and skill development.
The Survey underlines the importance of rejuvenating and strengthening the micro, small and medium enterprises (MSME) and small businesses in the formal and informal sector.
The small businesses segment has been performing below potential due to adequate and affordable financing, rising input costs, competition from imports and an unfavourable business environment in general, the Survey says, pointing out that the informal business segment is critical to job-creation.
