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He is a man of action and is showing the world that he means business. In many firsts in the month that went by, Prime Minister Narendra Modi presented India to the global industry as a nation that is seeking to attract investors with reforms and measures promising ease of doing business armed with the ¨make in India¨ slogan. It´s an expansive attempt to revive the manufacturing sector in the country and the mission has set its sights to increase the share of manufacturing to 25% by 2022, a task which would require a herculean effort with the present share of manufacturing sliding down to 12% of GDP.
According to this new initiative, the increase in manufacturing output will result in the creation of 100 million new jobs. Apart from the key areas that need to be prioritized and spruced up, infrastructure along with innovation, SMEs and skill development will need to be given the first look to arrest the declining share of manufacturing in the GDP. Creating the right infrastructure is a big challenge as project delays owing to various reasons have really hurt the trillion dollar dream of the Indian infrastructure sector.
Funding is a critical issue that has been hampering the growth of the infrastructure sector. Modi´s tour to Japan saw him garnering FDI that is set to reach $35 billion in the next five years and China too showed renewed interest in Indian infrastructure. He has offered US industry lead partnership in developing three Smart Cities, as he has offered similar cooperation to Japan, China and Singapore. And his efforts seem to have hit the right chord as both countries pledged to establish an Infrastructure Collaboration Platform convened by the Ministry of Finance and the Department of Commerce to enhance participation of U.S. companies in infrastructure projects in India. India will also welcome two-trade missions in 2015 that will focus on providing US technology and services to meet the country´s infrastructure needs. The government is pushing for the reforms to become a reality. While pushing for creation of new infrastructure capacities, Modi has tasked all core sector ministries with boosting by at least 10% the efficiency of India´s existing infrastructure such as power, ports, roads, coal mines and telecom by March 2015. He has earmarked clear measurable outcomes to determine if the country has got concrete results from its infrastructure spend by the end of the financial year.
And after three sluggish growth years of the infra sector, the outlook of most of the core sectors is witnessing a positive change. Between April and August, power generation capacity increased by 8,400 Mw, nearly 47% of what was achieved in all of last year.
Port projects worth Rs 4,200 crore have been awarded under the new government while five ongoing projects have been completed, boosting India´s export-import capacity for goods by over 30 mtpa.
As India´s infrastructure market is expected to touch $6.6 trillion by 2025, according to PwC estimates, the roadmap is getting laid to attain the desired growth and make India claw its way back on the global map.