New Delhi, Apr 18: Prime Minister Manmohan Singh today visualised a 12 per cent growth for the manufacturing sector, pinning hope on the new policy interventions and industry level initiatives, and advocating flexibility in labour market.
He also assured the country of a new look infrastructure and new sense of dynamism by 2009, envisaging larger involvement of the private sector.
Addresing the Annual Conference of the Confedration of Indian Industry (CII), the Prime Minister said only the manufacturing sector could provide the jobs that were required to absorb the vast numbers of the people who will necessarily need to move out of agriculture.
He said the National Manufacturing Competitiveness Council set up by the Government had adopted a holistic perspective.
''We seek an acceleration of employment generation and of income and output growth. This must come from an increase in the share of the manufacturing in our national income. This must happen not just through expansion of large-scale industry, but also of small and medium enterprises and rural enterprises,'' the Prime Minister said.
''Our endeavour will be to create a policy framework that can and must deliver an annual growth rate of 12 per cent in manufacturing output. The High Level Committee on Manufacturing should, I believe, become a single window for generating, coordinating and monitoring policy initiatives in this area,'' he said.
The National Manufacturing Competitiveness Council has also identified key sectors where India can become a global manufacturing hub, said Dr Singh, adding that It has advocated a 'cluster approach' to ensure economies of scale and scope in the development of our key industries.
The boom being witessed in Special Economic Zones (SEZs) will also create competitive export clusters.
He underlined the fact that the development of the manufacturing sector depended not just on the tax regimes, or the infrastructure support, but also on the pace at which the home market grew, on the rate at which domestic skills were created, and the pace at which technical competencies and new technologies could be generated.
In this context he said he recognised the need of labour market flexibility, but at the moment there was no consensus on the issue.
''We have been handicapped by a lack of a meaningful political consensus on this issue, but I assure that I will persist and I have not lost hope that we will be able to impart a measure of flexibility to the labour market situation in years to come,''said Dr Singh.
Underlining the special attention being given to infrastructure development, the Prime Minister referred to the exciting results shown by greater private sector participation through BOT route. Dr Singh assured that by 2009, Indian infrastructure would have a new look and a new sense of dynamism. Noting the ''impressive'' progress made by the telecom and IT sectors, he said the country must now facilitate the growth of an electronics, IT and telecom hardware industry.
''I have recently constituted a Task Force to focus on the growth of electronics and IT hardware manufacture. To maintain the vibrancy of the telecom sector, we have set up a Group of Ministers to enable early vacation of spectrum by existing government users. We hope to make this capacity available for commercial use in a time-bound manner,'' he added.
He urged the industry to consider using the influence it has acquired to create a wider national consensus in favour of long-term initiatives for economic growth and social development.
The Prime Minister said the Indian industry must pay closer attention to the environmental consequences of industrial development and it must also think big about rural development and agrarian change.
''To sustain double-digit industrial growth and national income growth of 8-10 per cent, we must make the growth process more broad-based,'' he said.
He also laid emphasis on generation of demand as prerequisite for growth.
The redistribution of land and tenancy reform can improve the income and asset base of the rural poor and generate demand for rural housing and other infrastructure.
The industrialisation experience of economies as diverse as Japan and China demonstrates the importance of agrarian reform and security of tenure in sustaining higher rates of industrial growth, he sought to point out.
The Prime Minister urged the CII to give more attention to questions of social and economic discrimination and deprivation and to such issues as educational and health status, employment generation, social security and empowerment of women and minorities.