The government will focus on acquiring raw material assets abroad as it seeks to boost economic growth to double-digit levels, finance secretary Ashok Chawla said on Friday.
Citing the example of the oil sector which had acquired such assets, the finance secretary said this policy “will be extended to other sectors of manufacturing” at Beyond Budget 2010: The India Agenda, an event organised by Mint in Mumbai.
“The government is engaged in preparing a policy for the manufacturing sector that will focus on acquiring raw material (assets) abroad wherever it is necessary,” said Chawla.
Economists and policy makers say supply constraints in areas such as food grains, raw materials and infrastructure could prevent the economy from accelerating to double-digit levels, which the government says is needed to eradicate poverty and boost jobs.
Two weeks ago, the petroleum secretary had suggested that the country’s foreign exchange reserves be used for buying energy assets abroad.
State-owned ONGC Ltd, the country’s largest oil producer, has so far bought oil fields through its arm ONGC Videsh Ltd in Brazil and Russia.
“The manufacturing sector is showing a renewed energy, a renewed vigour” but it needs to be “at the vanguard of industrial development,” said Chawla. He said the government will focus on supporting the sector not only because it provides employment but also because it needs to get to the next level, the finance secretary said.
India’s manufacturing sector needs to “join the comity of nations whose manufacturing sector can take on the world.”
Chawla said the finance minister will chair the proposed super regulator — the Financial Stability and Development Council. He said this won’t detract from the role of the Reserve Bank of India.
“All it means is that at the top of the pyramid there will be an apex regulator,” he said.
While reiterating that fiscal health was the overriding message of the budget and would be the guiding principle in the future, Chawla said the government will focus on agriculture, infrastructure, improving skill sets of employable Indians and reforming the delivery system of basic social services.