Taxation: the biggest impediment

June 26, 2014 6:22 am

 Any economy whose growth is dependent on manufacturing sector, must witness a contribution from this sector in excess of 20 per cent to make worthwhile impact on the GDP growth
 Schmalz India Pvt. Ltd. is part of the international Schmalz-Group. It assures that its vacuum components and ready to connect gripping systems ensure efficient processes in automation, ergonomic vacuum lifters. About India’s chances to become global workshop, Philip Mani emphasises on realistic view to achieve the goal.
A good inspirational goalA thriving and competitive manufacturing industry needs an excellent infrastructure that would enable it to be competitive on cost, quality and supply chain. These are the three important parameters that determine the success of the industry.
To become a global manufacturing hub is a good inspirational goal for India. However, attaining this goal needs a realistic view, considering the problems the manufacturing sector is facing today, amidst growing concerns of global economic slowdown, poor infrastructure, volatile currency fluctuations and inflexible labour laws.
Decisive factorsThere are some decisive factors that can play important roles in India’s journey to reach its goal. These include better infrastructure, reduced currency fluctuations, better labour laws, adequate resources of power and water.
Problems to deal withAny economy whose growth is dependent on manufacturing sector, must witness a contribution from this sector in excess of 20 per cent to make worthwhile impact on the GDP growth. Current taxation is such that it is often easier and cheaper to import equipment than manufacturing it locally. This is the biggest impediment for the growth of manufacturing industry.Significant improvements are required in power, ports and people issues coupled with a tariff structure. However, most states do not provide grid power and the cost of captive power to grid is 1:3, while water is a huge challenge in almost every state.

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