The government plans to address labour issues, infrastructure deficit and high cost of capital soon to meet the "uphill tasks" of raising share of manufacturing in gross domestic product (GDP) from 15 to 25 per cent, Finance Minister Arun Jaitley said in the national capital on Wednesday.
"I still find in merchandise products, our cost of capital, or labour regime, our infrastructure, the improvements which are required in our trade facilitation - these still have to be assisted in order to bring down the prices of our manufactured products," Jaitley said.
"And as part of 'Make in India' campaign these are special areas which we will have to address and address very soon. We are in the process of doing so," the Finance Minister said.
The country is endeavouring to become a global manufacturing hub, Jaitley said at an event organised by the Ministry of Commerce.
Noting that the real job creation is in the manufacturing sector, the minister said, "That's why one of our national challenges is that 15 per cent odd share of manufacturing today has to be increased to 25 per cent. But that's an uphill task and therefore that leaves us essentially with the services sector whose growth is a low hanging fruit in India."
Services sector is an area where there is huge space to grow and the country has potential to grow, he said.
"I have lurking suspicion that services sector would occupy about 60 per cent of the GDP space... This is one sector where governmental interference is minimal," he said.
The second aspect is that the country has proved to be a competent services provider globally.
"Our success in IT and IT services are well known... Several US Presidents have tried to impose restrictive regimes on outsourced services to save jobs in the US.
But that indirectly translated in simple language means that you are compelling the US consumers to buy costlier services from within their own country when the same service is available almost in same real time at a fraction of that cost outside. These rules have substantially not succeeded," Jaitley said.
Talking about sunrise sector of the country, the Finance Minister said, pharma sector was beginning to create an impact.
The other sectors which have potential for growth are health care, Research and Development, tourism and education, he added.
"I think these are areas we need to be aggressive on," Jaitley said.