Assocham wants infra spend be increased to 10% of GDP

Number of entrepreneurs need to go up from 3 crore to 9 crore to make Make in India a success, says the industry body

Industry body ASSOCHAM has suggested that investment in infrastructure should increase by atleast four per cent from current level of six per cent of India's gross domestic product (GDP). This would ensure that 'Make in India' initiative leads the country's growth and development agenda for the coming decades.

"Pension and insurance funds being long-term investors can be mobilised for infrastructure spending, besides, public-private partnership model should be redesigned through engineering, procurement and construction (EPC) model," stated the study titled 'Make in India:, The next leap,' which was released here today.

Quoting the report, Ravindra Sannareddy, chairman, ASSOCHAM Southern Region Council, said that while the special economic zones (SEZs) need to be revived by a systematic review of reasons for their failures, there is also a need to perk up the physical infrastructure by facilitating land acquisition and rationalising labour and tax laws.

"Amidst a great hype about start-ups, India has a lot more ground to cover in developing entrepreneurship as the country is just one-third of the performance in similar economies on this count, which can be lifted only by a big leap to manufacturing through initiatives like 'Make in India'," the study added.

According to D S Rawat, secretary general, ASSOCHAM, if India need to achieve the same level of weighted average of 12.4 per cent, the number of entrepreneurs will have to go up from nearly three crore at present to nine crore..

"Culture of entrepreneurship needs to catch up in India as only 4.12 per cent of population aged 18-64 is engaged in business while the weighted average for similar factor-driven economies is 12.4 per cent," he said.

Emphasising the fact that 'demographic dividend' should not be allowed to become 'demographic cross' the study stated, "Self-employment can be pushed through manufacturing in the large scale units which, in turn create trickle down jobs in vendors and subsidiaries."

The report said India needs to generate 13 million jobs per annum. "The number of people seeking jobs during this period grew by 2.23 per cent per annum while growth in actual employment was 1.4 per cent, leaving a huge gap in job creation. In terms of perception of social values of entrepreneurship, India fares badly. As a career choice, it scores 10 percentage points lower than Vietnam which is also a factor driven economy, besides China and Indonesia which are efficiency driven economies and at the next stage of development have in fact scored 10 percentage points or higher than India," the study said.

"But for the manufacturing to grow at the entrepreneurship level, the eco system must improve," said Rawat. "As many as 70 laws need to be complied with and 100 annual returns to be filed by a manufacturing unit, this is unsustainable."