The government on Monday said the contribution of manufacturing to the overall economy needed to be cranked up to at least 25%, while jobs need to shift from agriculture for a more equitable growth in the domestic economy.
“Currently agriculture accounts for 16-17% of the economy while 70% of population is dependent on it. Manufacturing on the other hand accounts for only 16% which is not acceptable,” said Jyotiraditya Scindia, minister of state for commerce and industry at the India Economic Summit “To achieve the right balance, manufacturing has to contribute more.”
Industry sources said 12% growth in manufacturing, as witnessed in the first half of this fiscal, is sustainable.
“In the first half, the base was very low. A 12% growth rate does not look sustainable,” said Pawan Munjal, MD, Hero Honda. “A 5-10% growth rate is much more realistic and achievable. Also I do not think the growth has been broad based. While automobiles and FMCG sectors have grown well, textiles, cement and capital goods have witnessed modest growth.”