India Should Focus on Service or Manufacturing Sector
India Should Focus towards Service or Manufacturing Sector (Phase-1)
It is speculated that by 2022; India will be the fastest-growing economic engine of the world, with an average annual growth rate of 7.7%. The Government of India is focusing more on the manufacturing sector under ‘Make in India’ to achieve the dependency and to minimize trade deficit. It should be done by maximizing the export. The reason behind this is, Industrial led growth path was skipped from the agricultural sector to the service sector. Still, the dilemma is that India should focus on service or manufacturing sector
Things to Boost Manufacturing Sector:
To boost the manufacturing sector to the nation’s competency and capability; it will require a lot of changes and reforms, including infrastructure, tax structure, economic and government policies. We can depict that India is somewhere following the growth strategy of China. Nevertheless, it would be a tough task to beat China’s low-cost manufacturing in a brief period. Statistics also tell that road transport in India costs $7 per Km whereas in China the cost is around $2.5. During the festival of Diwali, crackers and other electronic gadgets are imported from China in a vast quantity.
Magnificant Contribution By Service Sector:
On the contrary, where India should focus towards service or manufacturing sector; it was ipso facto proven right that the phenomenal growth of India. Furthermore, the significant contribution to its GDP is by the service sector, i.e. more than 58%. This is why the government of India should attempt more sophisticated ways by which service sectors can bring back the golden decade of 2000 to 2010. When the Indian economy reached a tremendous growth rate of 10% in GDP; it is fully backed by the service sector. Indian education and health sectors can contribute immensely to it.
Facts and Figures!
A study carried out by HSBC’s Retail Banking and Wealth Management business in 2014; highlighted that India is the cheapest place for overseas students with the annual expenditure in India turning out to be just $5642 per year concerning other countries like USA, Canada, Hong Kong, Australia; where it hovers around $40000 per year.
Similarly, foreigners visiting India on Medical Visa are also increasing year by year. As cosmetic procedures like laser surgeries, skin surgeries, facelift, nose jobs, etc. are very cheap as compared to other countries of the world. We can use this as the most tactical weapon to propagate our education sector and medical tourism at international munch. Moreover, it can achieve tremendous growth and development.
Tax Reforms and Make In India:
On the contrary of whether India should focus towards service or manufacturing sector; PM Narendra Modi has termed as historic the cut in corporate tax rates. He also said economic announcements made show the government is leaving no stone unturned to make India a better place to do business.
“The step to cut corporate tax is historic. It will give a great stimulus to Make In India, attract private investment from across the globe. Also, improve the competitiveness of our private sector; create more jobs and result in a win-win for 130 crore Indians,” Mr Prime Minister said in his series of tweets.
Closing Key Note:
Thus, we need to stick to our core competencies till the time we get fully equipped with the labour, machinery, supply chain, infrastructure and tax structure to take on the price warhead to head.
Vis-a-vis, new tax structure in manufacturing industries will be a great boom to the MSEs and tax benefits will boost their courage. It can also help India to become independent in manufacturing as well as the service sector. En-Passant, it will be too early to decide the destiny of India’s growth and development is towards the service sector or the manufacturing sector.
But the reasons of economic slowdown and the corrective measures will be explained in next blog “INDIA SHOULD FOCUS ON SERVICE SECTOR OR MANUFACTURING SECTOR”
Sachindra Vikram Singh
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