February 11, 2021 12:42:06 am
A Parliamentary Standing Committee on Commerce has flagged issues like India’s poor industrial performance, “distressingly high” logistics costs and a high dependence of crucial manufacturing sectors on imports from countries like China as impeding the growth of these sectors.
It has also expressed concern over the sharp contraction of India’s GDP during the first quarter of the 2020-21 financial year, stating that the Covid-19 pandemic and subsequent lockdown has exacerbated the trend of decline in the country’s growth trajectory. The committee, chaired by V Vijayasai Reddy of the YSR Congress Party, had examined and discussed the opportunities and challenges for attracting investment, analysed some of the issues affecting ease of doing business and explored measures to make India a global manufacturing hub.
According to the committee, healthy economic indicators are “vital” for attracting foreign investors and the government should make “concerted efforts” to revive the economy and recover from the current slump.
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In its report presented on Wednesday, the committee said that the main challenges faced by the country at present included administrative and regulatory hurdles, inadequate and costly credit facility, “tedious” land acquisition procedures, inadequate infrastructure facilities, and the “large” unorganised manufacturing sectors like the toy industry.
The panel has suggested that healthy economic indicators are “vital” for attracting foreign investors and the government should make “concerted efforts” to revive the economy and recover from the current slump.
“The policy changes and incentive schemes brought in by the government to overcome these challenges are welcome measures and are in the right direction. However, success depends on the implementation of the reforms through seamless coordination between various Ministries and Departments of Government of India as well as the Central and State Governments,” noted the report.
While the trade deficit with China has been “moderating” in recent years, the “huge” deficit was “deeply” concerning for the committee, which also noted that India relies “heavily” on manufactured items from the neighbouring country. The committee said it was “deeply” concerned with the pharmaceutical sector’s dependence on China for critical ingredients.
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