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Expecting a moderation in interest rates in coming days to spur manufacturing growth, Finance Minister Arun Jaitley on Friday said Indian industry can take on China, with lower wage cost and competitive pricing of products.
Speaking at a leather industry event, he said India’s largest competitor faced a “great challenge of a high wage bill”. China's labour cost, once affordable, is now high. Therefore, their (China's) costs have to go up... Our wage Bills are lesser than our competitors. In future, hopefully, with interest rates also moderating, the costs would have to be kept under control,” he said.
Jaitley said in the past India had slowed in cost competitiveness because of its labour regime, cost of utilities like power, infrastructure, high cost of capital and various other factors. “As the Indian economy is growing today ... it is also important for us to utilise all our potentials from thermal to hydel to non-conventional (power) and bring down the cost of production itself as the quantity of power production in this country is increasing,” he said. Infrastructure is an area of top most priority for the government. “We are investing a lot into our railways, rural roads, highways, ports, and hopefully with power situation in place, our wage bills are lesser than our competitors,” Jaitley said.
He said the services sector growth has been "reasonably well" over the last few years and this year the agriculture growth is also comfortable. For India to grow in future, emphasis should now be on the manufacturing sector, he said.
He also hoped that the changed regime of indirect taxation should come into this country "sooner or later". The government proposes to roll out indirect tax reform Goods and Services Tax (GST) from April 1, 2016.
