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Reduction in cost of manufacturing, including interest (or capital) cost is critical for making India a global manufacturing hub, JSW Group Chairman and MD Sajjan Jindal today said.
Exuding hope that the interest rates will come down soon, Jindal said, "At present, inflation is low and banks are plush with funds, making a case for lowering interest rates. Manufacturers need cost of capital to come down to become competitive. We have to fix this problem first"
"The manufacturing sector should also develop an ecosystem ensuring high competitiveness of manufacturers, while adding that value addition and research and development support was also very important for the success of manufacturing sector," he said while speaking at the CII Manufacturing Summit organised by Confederation of Indian Industry.
Referring to the government's aim of increasing the share of manufacturing sector to 25 per cent of the economy, he said to achieve this target, Indian manufacturing should grow at 12 per cent per annum in the next 6-7 years.
Commenting on the impact of demonetisation on the industry, Jindal said it is a short term pain but the country will gain in the long run.
"Prime Minister Narendra Modi is doing a tough job to switch parallel economy to digital economy. We see challenges, but organised sector across the country is shifting towards digital economy," he said.
Inaugurating the conference, Ajay Shankar, chairman, Expert Committee on Regulatory Approvals, Department of Industrial Policy and Promotion said, "Not interest cost alone, but all other associated costs like cost of land, cost of clearances etc, also should come down, and a good leasing industry should be developed for facilitating capital goods availability to make India a manufacturing hub of the world.
Proposing a Public-Private Partnership (PPP) model for
manufacturing, he said, "Time has come for adopting this model for manufacturing now. Think of possibilities it can create and explore how we can really leapfrog from the present level using fourth generation of manufacturing technologies."
PPP model has been already adopted in infrastructure and health sectors.
Stating that India should emulate Israel in tapping the strengths of its diaspora in building technological edge in several sunrise sectors, Shankar said, "Israel could do so because it could tap into success of Jewish community in the US. We also have a comparable advantage today because Indian people are successful in many sectors across the world."
All these initiatives could boost manufacturing sector growth to 12-14 per cent that is required to take the sector's share in India's economy to 25 per cent, he said.
Pawan Goenka, MD, Mahindra and Mahindra, said that industry not only changes the face of manufacturing, but it involves digitisation of all operations including integration of all the stakeholders in the network.
Job losses, re-skilling employees and capital cost are the challenges in adopting Industry 4.0. Auto industry is the only industry in India that has already adopted Industry 4.0 in its production process.
Industry 4.0, is the current trend of automation and data exchange in manufacturing technologies.
Head-Manufacturing and Quality of Bosch India, Andreas Wolf, said India could turn its IT prowess to its advantage in adopting Industry 4.0 technologies.