'India must boost infrastructure investment to 10% of GDP'

29 Sep '15

3 min read

In a new study, industry body Assocham has suggested that increasing investment in infrastructure by at least four per cent from current level of six per cent of the country's GDP to ensure that 'Make in India' initiative leads the country's growth and development agenda for the coming decades, according to a joint study by industry body Assocham and Thought Arbitrage Research Institute (TARI).

"Investment in infrastructure needs to go up from the current level of 6 per cent of gross domestic product (GDP) to about 10 per cent to ensure Make in India initiative leads the country's growth," the study titled 'Make in India:, The next leap,' said.

The study also suggested mobilizing pension and insurance funds for infrastructure spending and said "public-private partnership model should be redesigned through engineering, procurement and construction model".

The report was released in Chennai by Ravindra Sannareddy, Chairman, Assocham Southern Region Council along with Assocham Secretary General DS Rawat.

Snareddy quoted the study saying that while the special economic zones (SEZs) need to be revived by a systematic review of reasons for their failures, there is also a need to perk up the physical infrastructure by facilitating land acquisition and rationalising labour and tax laws.

"Amidst a great hype about start-ups, India has a lot more ground to cover in developing entrepreneurship as the country is just one-third of the performance in similar economies on this count, which can be lifted only by a big leap to manufacturing through initiatives like 'Make in India'," the study added.

The report said India needs to generate 13 million jobs per annum. "The number of people seeking jobs during this period grew by 2.23 per cent per annum while growth in actual employment was 1.4 per cent, leaving a huge gap in job creation. In terms of perception of social values of entrepreneurship, India fares badly. As a career choice, it scores 10 percentage points lower than Vietnam which is also a factor driven economy, besides China and Indonesia which are efficiency driven economies and at the next stage of development have in fact scored 10 percentage points or higher than India," the study said.

"But for the manufacturing to grow at the entrepreneurship level, the eco system must improve," said Rawat. "As many as 70 laws need to be complied with and 100 annual returns to be filed by a manufacturing unit, this is unsustainable." (SH)

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