PM-led panel to discuss strategy to push domestic manufacturing

NEW DELHI: A high-level meeting convened by Prime Minister Manmohan Singh will discuss a spectrum of ideas to boost domestic manufacturing, including building an indigenous mid-sized civilian aircraft. The committee will also discuss ways to boost steel production and textile exports, besides the launch of pilot project on electric and hybrid vehicles for Delhi.

The manufacturing sector has seen a sharp deceleration in growth in the last one year, with growth falling to 1% in 2012-13 and showing no signs of pick up even in the current fiscal. The manufacturing slowdown has also spilled over to the services sector. The high-level committee on manufacturing is headed by the prime minister and includes ministers of finance and commerce and industry, deputy chairman of Planning Commission, chairman of Economic Advisory Council and the principal secretary to prime minister. The chairman of the National Manufacturing Competitiveness Council is the member convenor.

The committee will explore and deliberate on ways to use the sharp rupee depreciation against the dollar to its advantage, especially to boost textile exports. Apparel exports declined by 6% in 2012-13 to $13 billion dollars on slowing demand in the US and European Union. Textile as a sector can best leverage the rupee depreciation since the import content in manufacturing is almost nil.

India’s overall exports had declined by 1.76% last fiscal to $300.3 billion. Rupee has depreciated by around 13% against the dollar since May, making it one of the worst performing currencies in emerging markets. It closed at 60.62 against the dollar on Monday.

One of the most crucial decisions expected on Tuesday is on the proposal to build a 90-seater aircraft, which has been in the pipeline for a number of years. According to the proposal, the design and development of the aircraft is expected to cost Rs 4,355 crore and series production would entail further expenditure of Rs 3,200 crore. The meeting is also expected to finalise an action plan to develop production capacity in advanced alloys and composites. The meeting will try and look for ways for a quantum jump in steel production using existing plants and land.

The government has already announced a National Manufacturing Policy that seeks to take the share of manufacturing to 25% of GDP in the next 10 years from around 14% now.