New Delhi, Aug 7: Expecting a moderation in interest rates in coming days to spur manufacturing growth, Finance Minister Arun Jaitley today said the 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 China is facing today a "great challenge of a high wage bill".
China's labour cost, which was once affordable, is now high. "And therefore their (China's) costs have to go up... Our wage bills are lesser than our competitors. As we go on to future years, hopefully with interest rates also moderating, the costs therefore have to be kept under control," he said.
Jaitley said, in the past, India had slowed down 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.