‘Make in India’: Jaitley hits back at Rajan

Rebutting RBI Governor Raghuram Rajan’s critique of the government’s ‘Make in India’ strategy, Finance Minister Arun Jaitley said on Monday that the flagship scheme is aimed at manufacturing quality products at low costs, and whether they are sold in India or abroad is not relevant.

“Whether Make in India is for consumers within India or outside is not so relevant… The principle today says that consumers across the world like to purchase products which are cheaper and are of good quality. They hire services which are cheaper and of good quality,” said Jaitley. Speaking at the inaugural session of the government’s ‘Make in India’ campaign workshop here, Jaitley also singled out the high cost of capital as the one factor that has adversely impacted the manufacturing sector, which saw growth plummet to an over five-year low of 7.6 per cent in October.

His remarks assume significance in the wake of the Finance Ministry’s continuous prodding to the RBI on lowering the policy rates, something the central bank has refused to do since January 2013 citing inflation concerns.

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Speaking at an event organised by FICCI on December 12, Rajan had said that an export-led growth or import-substitution strategy may not  work for India as it did for Asian economies, including China.

Citing the tepid global economic recovery, Rajan had said, “Other emerging markets certainly could absorb more, and a regional focus for exports will pay off. But the world as a whole is unlikely to be able to accommodate another export-led China.”