Make in India may get funding boost

AN INFORMAL GOM HAS DISCUSSED THE PROPOSAL AS PART OF ATMANIRBHAR BHARAT

NEWDELHI: India is weighing a proposal to set up a dedicated institution to finance manufacturing activity, addressing a major hurdle that made Indian exports uncompetitive against those manufactured in China, said two people aware of the development.

The proposal was discussed by an informal Group of Ministers (GOM) on manufacturing against the backdrop of the Union government’s Atmanirbhar Bharat, or self-reliant India, strategy.

The discussion also comes at a time when India’s public procurement rulebook has been rewritten for compulsory purcrore chase preference to local suppliers. This is aimed at pushing India’s attempts to become an integral part of global supply chains as firms look to move production lines out of China following the pandemic that originated in Wuhan. “Banks are currently not equipped to finance manufacturing. The issue has been discussed,” said a government official, one of the two people cited above, seeking anonymity.

After announcing a ₹20 lakh stimulus, equivalent of 10% of India’s gross domestic product, the government is now preparing to roll out the measures that are urgently needed to stimulate the economy.

“The informal GOM has been set up to boost manufacturing in India. This requires fixing issues regarding labour laws, financing and technology. The major issue is financing. As compared to India, China provides financing for manufacturing for interest rates as low as 1%. The issue is under consideration,” said the second government official cited above, also seeking anonymity. A finance ministry spokesperson declined to comment on Mint’s queries emailed on Sunday.