WHEN Union Finance Minister Nirmala Sitharaman presents her sixth annual Financial Statement and Budget speech in Parliament, she will equal the record set by Morarji Desai. Among the many things that she will take credit for, the foremost may well be the fact that the Indian economy is once again the “fastest growing large economy” in the world. There is much to be said for that record. However, the foundations on which this growth is being built remain weak. The weakest links in the Indian growth story remain the poor performance of the manufacturing sector and the even less impressive performance on the education front.
It was as far back as 2004 when Prime Minister Manmohan Singh constituted the National Manufacturing Competitiveness Council (NMCC) with V. Krishnamurthy as chairman. Krishnamurthy had earned a good reputation as a leader in the manufacturing sector with his leadership at Bharat Heavy Electricals Ltd (BHEL) and Maruti. The NMCC did considerable work and by 2006 produced a document titled “National Strategy for Manufacturing” aimed at boosting the rate of growth of manufacturing in India to a sustained 12 percent to 14 percent per year and increasing the share of the manufacturing sector in national income from around 16 percent in 2006 to 23 percent by 2015. In the event, that did not happen and the share remained stubbornly stuck at 16 percent.