Union Finance Minister Shri Pranab Mukherjee held meeting with the stakeholders of different Industry Groups to get their inputs for General Budget 2011-12, here today. This was the second meeting in the series of pre-Budget consultations held by Finance Minister with the stakeholders of different sectors. First meeting was held on Friday, the 7th January, 2011 with the stakeholders of agriculture sector.
In his opening remarks, the Finance Minister said that a good performance of industry is vital for the overall growth of the economy and for the growth of government revenues to fund critical public expenditure on social and infrastructure development in the economy. He said that Indian industry, particularly the manufacturing sector, has been an important growth driver in recent years. The Finance Minister said that we have seen the economy clock over 9 per cent GDP growth in the years prior to the global economic slowdown, which impacted us in years 2008 and 2009. Shri Mukherjee said that we have done well in recovering our growth momentum from this slowdown and the impact of other external shocks over the last two years. Shri Mukherjee said that the recovery has been broad based with agriculture, industry and services all contributing to the consolidation of the growth process and he is happy to see the performance of the industrial sector in the past few months.
The Finance Minister said that the industrial production has achieved a cumulative growth rate 10.3 per cent during April-October 2010. Sustained robust expansion in capital goods and consumer durables segments is an indication of the pick-up in industrial activity, he added. The Finance Minister further added that the strong growth in capital goods also suggests an improvement in investment and business confidence. Merchandise exports during April-October of this financial year have increased by a healthy 27 per cent, said the Finance Minister.
The Finance Minister Shri Mukherjee said that the Government is conscious of two major concerns relating to the pace of development of infrastructure and investments in Research and Development (R&D). He said that both these issues have a direct bearing on the productivity of Indian enterprise. Shri Mukherjee said that the investment in infrastructure sector is also the key to sustainable and inclusive growth. He said that our spending on R&D as a ratio of GDP is very low in comparison to other emerging economies and we need to make all possible efforts to invest in R&D and innovate in order to remain competitive. In both these areas, the Finance Minister said that the Government alone would not be able to achieve the desired outcomes without the complementary efforts of the private sector, be it in the form of Public Private Partnership (PPP) or purely private initiatives. He asked for the suggestions from representatives of industry present to enhance and strengthen the private sector participation in infrastructure and R&D initiatives.
The Finance Minister Shri Mukherjee said that he would also like to hear specific short and medium term suggestions from the stakeholders of industry sector for sustaining a double digit growth in industry and for stepping up the growth of manufactured exports. He asked for their specific observation about the corporate tax collections in the current financial year which are not keeping up with the anticipated trend.
After that the stakeholders representing the different industry groups gave their suggestions for consideration for General Budget 2011-12.