NEW DELHI: India should focus on manufacturing, as well as newer areas of services, finance minister Nirmala Sitharaman said on Friday. Her statement comes after former Reserve Bank of India (RBI) Governor Raghuram Rajan criticised the government’s production linked incentive (PLI) scheme to promote manufacturing.
“If there are voices suggesting that India should not focus on manufacturing, but it should focus only on services, I am sorry, no,” Sitharaman said at the Federation of Indian Industry and Chambers of Com[1]merce (FICCI).
“We should be focusing on manufacturing services, as also newer areas of services. No doubt the IT driven services have already made a big impact to the extent that 60% of our GDP is being contributed by them. But it is necessary to strengthen our manufacturing and in that Indian startups have shown us the way which is going to be very suitable for our industry. They are doing all the innovation,” she said.
The minister exhorted the industries to keep a close watch on the innovations, which are coming out of start-ups. “If you are ready to adopt, commercialise and scale up that innovation, which is coming out of start-ups, I think we will benefit ourselves. The Unicorns coming up with fantastic ideas are all for you to pick up and scale up,” she further added.
Criticizing the government’s PLI scheme, former Reserve Bank of India (RBI) Governor Rajan has on many occasions said that rather than spending on manufacturing, the Centre should spend its money on services, which will create more jobs.
Recently, in an interview with Rahul Gandhi, Rajan said: “We need to look at the services sector which can create more services than the manufacturing sector….consulting firms earlier used to have a back office here in India but now they are hiring consultants here as if they are working there in the US. For this, to increase hiring, youth need higher education and knowledge.”
Meanwhile, the finance minister also said that the upcoming Budget will follow the spirit of previous Budgets with focus on growth.
Govt should spend money on services sector: Rajan
Criticizing the government’s production linked incentive (PLI) scheme, former RBI Govenror Raghuram Rajan recently said rather than spending on manufacturing, the Centre should spend its money on services, which will create more jobs