New Delhi, Jan 4 (KNN) Reacting to Prime Minister Manmohan Singh's admission that enough jobs could not be created in the manufacturing sector, industry body FISME today said that large part of the problem of industrial slowdown lie within the country.
 
According to the Federation of Indian Micro, Small and Medium Enterprises (FISME), the manufacturing sector suffered due to number of reasons which included large projects getting stuck and wage inflation slowing down the demand and leading to high input costs.
 
“The reasons for deceleration in manufacturing have both been internal and external,” FISME said.
 
“We can’t do much about the external challenges as large global economies especially in the west are still in the process of recovery after prolonged recession,” FISME added.
 
The industry body further said that, “We can’t escape the blame for slowing down of Indian manufacturing with the large scale projects getting stuck due to policy paralysis and massive overspend on welfare schemes which led to ballooning of fiscal deficit, which ultimately led the economy coming to the grinding halt.”
 
Prime Minister yesterday said in his press conference that his government has not been much successful in creating employment in the manufacturing sector.
“I am concerned that we have not been as successful as we need to be in generating employment in the manufacturing sector. This is an aspect of performance which we are working hard to correct,” Singh said.
 
“We need a much stronger effort in support of small and medium enterprises which can be a major source of good quality employment…,” he added.
 
Meanwhile, other industry bodies like ASSOCHAM and FICCI said that the manufacturing sector needs a revival boost.
“ASSOCHAM cannot agree more with the Prime Minister’s observation that the manufacturing sector could not generate the desired number of jobs. The reason for this was economic slowdown, coupled with lack of determined policies to give a great push to the manufacturing,” according to a statement by ASSOCHAM.
 
“SMEs hold the key to job creation, which should be encouraged. Let elections, as the Prime Minister has eloquently observed, should not deter the policies which can lead to higher growth, employment and reduced inflation,” the statement added.
 
Industry body FICCI said, “The manufacturing sector is a core enabler for job creation. A healthy macro-environment is a precondition to allow expansion of businesses and encourage new entrepreneurs.”
 
“FICCI has always advocated sound governance, policy clarity and effective implementation to achieve desired outcomes in terms of growth; we certainly expect more action in these areas.” It added.
 
According to an HSBC survey, India's manufacturing PMI was down to 50.7 in December as against 51.3 in November. It was down due to slower growth in output (51.3 vs 51.5 in November) and new orders (51.3 vs 51.9 in November) during the month. (KNN/SD)