Need to boost mfg to bridge CAD, trade gap: DIPP

 

The country needs to boost its manufacturing sector to bridge the ballooning current account deficit (CAD) and trade imbalance, a top government official said today.

"There is lot of talk about CAD and trade deficit. If you have to address the concerns of CAD and trade deficit, there is no option but to go for manufacturing," Secretary in the Department of Industrial Policy and Promotion (DIPP), Saurabh Chandra, said here at a Ficci function.

He said that there are countries which have trade surpluses equal to India's trade deficit.

"The top five countries which have trade surpluses, three are manufacturing power houses - Germany, China and Japan. The remaining two are oil rich nations," he said.

India's trade deficit have touched an all-time high of $191 billion during the last fiscal.

India's CAD deficit touched a record high of 6.7% of GDP in the October-December quarter. CAD occurs when a country’s total imports of goods, services and transfers is greater than the country’s total export of goods, services and transfers.

Chandra said that to increase the contribution of manufacturing sector in the country's GDP and create lakhs of jobs, manufacturing should be high quality.

He asked the industry to start focusing at voluntary and mandatory standards for quality manufacturing.

"For sustainable manufacturing, it has to be of high technology, high standard and quality is paramount," he said adding "there can not be value addition unless we go for high tech manufacturing. There has to be a depth in manufacturing, in R&D and production".

He also said that there is a need to shift jobs from agriculture sector to manufacturing for inclusive growth.

"According to estimates, China has transferred 150 million people from agriculture to manufacturing and created about 84 million jobs in the non-farm sector in rural areas," he added.

National Manufacturing Policy aims at increasing contribution of manufacturing to the national GDP from current 16% to 25-26% by 2025 and of creating 100 million jobs in the next decade.