Need to look at cost of doing business to boost manufacturing; cut statutory liquidity ratio: Amitabh Kant

Former NITI Aayog chief Amitabh Kant has called for reducing the statutory liquidity ratio (SLR) to enhance job-intensive manufacturing in India. Kant believes that while the Production-Linked Incentive (PLI) scheme offers a temporary solution, long-term improvements require lowering the cost of doing business. Currently, the SLR stands at 18%, which Kant considers excessively high for the Indian economy.

He argues that reducing the SLR would increase credit availability, crucial for manufacturing's long-term growth. Kant emphasized that access to credit is vital for startups in emerging sectors such as geospatial technology, enabling them to grow into disruptive companies. Additionally, he highlighted the importance of land acquisition, suggesting that countries like China, Vietnam, and Mexico support their manufacturing sectors through easy land leasing.

Kant also pointed out that India is unique among countries in that manufacturing enterprises pay higher electricity rates compared to residential consumers, a practice he deems unfair, effectively treating manufacturing as a secondary industry. He stressed the need for the government to address these domestic issues to boost manufacturing, noting that improvements in power costs and land acquisition could significantly enhance the manufacturing sector's competitiveness and employment generation potential.