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India to be US$ Five Trillion Economy in the Next Five Years

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Seshadri Ramkumar, Texas Tech University, USA

India is on growth trajectory and will be a US$ five trillion economy in the next five years. Mr. Piyush Goyal, cabinet minister holding the additional portfolio of finance ministry presented the interim Indian budget for the 2019-20 fiscal year on 1st February 2019, which offers several new initiatives that will support the growth of manufacturing sector like textiles, agriculture and digital economy. Particularly, the support for medium and small-scale manufacturing enterprises (MSME) will boost textile and allied sectors to go on high gear in research and development. In the United States, supportive schemes such as SBIR has enabled the growth of the R&D base and has helped the small business sector to be a major employer.

According to a new initiative, 25% of procurement by the Indian government should be made from the MSME sector and of which 3% should be from women owned enterprises. As handloom textiles, leather and other cottage industries are with unorganized labor, a new social security (pension) scheme for those aged 60 years has been launched. “The requirement insisted on government agencies to procure from MSMEs will definitely the boost the confidence among small players, which will grow the economy and create jobs,” stated Chennai, India-based Professor Sridhar Narayanan, convener of the education committee of the powerful industry body, Federation of Indian Chambers of Commerce and Industry, Tamil Nadu state unit.

Infrastructure, agriculture, digital infrastructure and defense sectors will enjoy greater and much needed support. In all these areas, advanced textiles can find new opportunities such as defense clothing, geosynthetics, etc. “Clean India” initiative (Swachh Bharath) will be of great significance towards rural development and hygiene sector, where again pollution prevention technologies and medical textiles can be a valuable contributor. Companies such as Chennai-based WellGro Tech (www.wellgrotech.com) are already focusing on “Make in India,” effort towards manufacturing products such environmentally friendly oil clean-up technologies, which evolved out of a collaboration between this scribe and a South India-based textile manufacturing company.

In order to support exports and domestic manufacturing, duty free import of some capital goods has been allowed and the customs logistics is being fully digitized to enhance trade. From the consumer point of view, the budget has supportive fiscal initiatives for middle class, low-income community and farmers, which should boost spending, thereby supporting nonessential commodity procurement by the general public.

 

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