Sending a clear signal to the Reserve Bank of India (RBI) to cut interest rates, Finance Minister Arun Jaitley called for increasing the flow of funds in the market at a workshop in New Delhi on 'Make in India' described by Prime Minister Narendra Modi as an example of "minimum government, maximum governance".
Inaugurating the high-profile workshop on the government's 'Make in India' programme, Jaitley said: "The cost of capital and, I think, in recent months or years, is one singular factor which has contributed to the slowdown of manufacturing growth itself."
"The credit offtake is slow, infrastructure creation becomes slower, the manufacturers find it difficult to afford costly capital, because it is going to add to each one of their costs. And, therefore, this is one area where each one of us has to be concerned about," he added.
The prime minister said his government was adding a new paradigm to the public private partnership (PPP) model by involving all stakeholders in key decision-making processes.
"This workshop was an example of openness, and working together to achieve desired goals. The decisions taken at this workshop would have taken years in normal course," Modi said at the concluding session.
Industry's pitch for rate cuts and economic reforms has become sharper with factory output registering a negative 4.2 per cent growth during October as compared to last year, even as retail inflation eased to a historic low of 4.38 per cent in November.
The RBI has maintained the benchmark repo rate - the rate at which banks borrow from it - since January this year.
The 'Make in India' campaign was launched by Modi on Sept 25, promising the investors, domestic and overseas, an environment conducive to turn the country into a manufacturing hub and, in turn, create job opportunities for at least 100 million youths.
The 25 sectors identified for advancing the 'Make in India' programme made presentations at the day-long workshop, titled 'Sectoral Perspectives and Initiatives', featuring ministers, industries and state chief secretaries.
A total of 18 sessions were held on the 25 sectors including chemicals, oil and gas, petrochemicals, capital goods, pharmaceutical, food processing, tourism, aviation, automobile, aerospace, defence production and skill development.
The sector-specific sessions at the workshop are required to prepare action plans for one and three years.
Representatives of Ford India, Maruti Suzuki, Mahindra & Mahindra, state-run enterprises, the Confederation of Indian Industry and the Federation of Indian Chambers of Commerce and Industry (FICCI) participated in the workshop.
Voicing industry sentiments, FICCI president Jyotsna Suri said: "We are entrepreneurial by nature. Give us a conducive environment, a rational tax regime and capital at a reasonable cost, and just see how we unleash the lion of the 'Make in India' programme."
Rejecting the contention of economists against India adopting an export-led growth path, Jaitley said the 'Make in India' programme is about manufacturing quality products at low costs, and is not relevant to whether these are sold in India or abroad.
"Whether 'Make in India' is made for consumers within India or outside is not so relevant. The principle today says that consumers across the world like to purchase products which are cheaper and are of good quality. They hire services which are cheaper and good quality," the finance minister said, referring to the changes wrought by globalisation.
Commerce and Industry Minister Nirmala Sitharaman said that while foreign direct investment inflows into India rose by about a quarter during April-October, a number of challenges remained in making the country a global manufacturing hub.
"Still there are a number of challenges to make India a global manufacturing hub that need to be identified and there has to be an action plan to overcome this," she said. "Nothing of this scale has been attempted in the recent memory. This national workshop is aimed at getting industry and government on the same platform."
