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PPP model can boost manufacturing sector, says DIPP

For India to increase the contribution of manufacturing sector in the economy, the country will have to seriously look at adoption of a robust public-private partnership (PPP) model.

“Time has come for adopting this model for manufacturing now. Think of possibilities it can create and explore how we can really leapfrog from the present level using fourth generation of manufacturing technologies (Industry 4.0 or Industrial Revolution 4.0),” said Ajay Shankar, Chairman, Expert Committee on Regulatory Approvals, Department of Industrial Policy and Promotion (DIPP), at CII Manufacturing Summit in Mumbai. PPP model has already been adopted in infrastructure and health sectors.

Stating that India should emulate Israel in tapping the strengths of its diaspora in building technological edge in several sunrise sectors, Shankar said, “Israel could do so because it could tap into the success of the Jewish community in the US. We also have a comparable advantage today because Indian people are successful in several sunrise sectors across the world.” 

All these initiatives could boost manufacturing sector growth to 12-14 per cent that is required to take the sector’s share in India’s economy to 25 per cent, stated Shankar.

Dr Pawan Goenka, Managing Director, Mahindra and Mahindra Ltd, opined, “Industry 4.0 not only changes the face of manufacturing, but it involves digitisation of all operations including integration of all the stakeholders in the network. Job losses, re-skilling employees and capital cost are the challenges in adopting Industry 4.0.”

Auto industry is the only industry in India that has already adopted Industry 4.0 in its production process.

Stating that Industry 4.0 involves more costs in training of personnel to adapt them to new technologies, compared to capital costs, Dr Andreas Wolf, head – manufacturing and quality of Bosch India said, “India could turn its IT prowess to its advantage in adopting Industry 4.0 technologies.”

According to Jamshyd Godrej, CII Manufacturing Summit chairman and chairman and managing director of Godrej & Boyce Mfg Co Ltd, application of digital technologies will transform Indian manufacturing by imparting speed, productivity and quality.

Apart from adopting latest technologies, reduction in cost of manufacturing, including interest (or capital) cost, is critical for making India a manufacturing hub of the world.

While exuding hope that the interest rates will come down soon, Sajjan Jindal, chairman and managing director of JSW Group, said, “At present, inflation is low and banks are plush with funds, making a case for lowering interest rates. Manufacturers need cost of capital to come down to become competitive. We have to fix this problem first.” 

The manufacturing sector should also develop an ecosystem ensuring high competitiveness of Indian manufacturers, Jindal said, while adding that value addition and research and development support was also very important for the success of manufacturing sector.

Referring to the government’s aim of increasing the share of manufacturing sector to 25 per cent of the economy, Jindal stated that to achieve this target, Indian manufacturing should grow at 12 per cent per annum in the next 6-7 years.

Source: Business Standard