Growth of India’s real GDP at 5.7 per cent in Q1 of FY18 is disappointing as the industry was in anticipation of rebound from low growth in last quarter of FY17, said Gopal Jiwarajka, President, PHD Chamber of Commerce and Industry in a press statement issued on August 31.
Although the world economy is showing signs of recovery, domestic economy is impacted by severe slowdown in the manufacturing sector which has posted a growth rate of 1.2 per cent in Q1 FY18 from 10.7 per cent in Q1 FY17, said the Chamber President.
Ease of doing business remains a major concern as manufacturing firms particularly he labour intensive units are impacted by various stringent laws and compliance costs. Going ahead, the breakthrough in GST should also be followed by reforms in labour laws such as a single uniform labour law across the country, he said.
The workforce participation in the productive sectors would help in expansion of production possibility frontiers and create enormous scope for expansion, deployment of workforce, resulting in improved income levels of the people, increase in demand for goods and services and a boost to manufacturing and industrial growth trajectories, he added.
There is a need to focus on reforms to improve the ease of doing business scenario particularly for MSMEs in order to encourage the setting up of more industries and improve the overall industrial environment, said Jiwarajka.
Focussed policy approach can highly improve the ease of doing business particularly in labour intensive sectors of MSMEs segments. Ease of doing business in the labour intensive sectors would leapfrog the growth trajectory of the firms which will contribute to growth of the economy in the coming times, he said.
The recent report on Ease of Doing Business released by NITI Aayog- IDFC Institute also indicates a grim ease of doing business as compared with the findings of the World Bank Report, he added.
Low growth in mining (-0.7 per cent), manufacturing (1.2 per cent), construction (2 per cent) and agriculture (2.3 per cent) has undermined the performance of overall GDP growth, he said. Reforms in the agriculture sector are need of the hour in terms of agri-infrastructure and supply chain of the various perishables.
As inflation is also inching up, there is a need to focus urgently on the supply of food products so that any shortfall is managed in a better way, he concluded.
