Subscribe to enjoy similar stories. New Delhi: The Union government is looking to fire up manufacturing activity—a crucial engine of economic growth that’s significantly slowed—by announcing factory clusters near major infrastructure projects and changes to tax and customs duties in the upcoming Budget.
Two officials familiar with the government’s thinking said the manufacturing clusters would strategically align with key infrastructure projects in logistic sectors such as roads, railways, and ports, generating significant employment. These hubs are meant to enhance the manufacturing’s contribution to India’s overall gross domestic product, they said, declining to be identified.
India’s manufacturing sector, which represents about a sixth of the country’s GDP, is expected to grow at a more modest pace of 5.3% year-on-year in 2024-25, down from 9.9% in FY24, according to the first advance estimate released by the Ministry of Statistics and Programme Implementation on Tuesday. “There have been discussions on boosting the manufacturing sector, with plans for strategically placed clusters near infrastructure hubs, not only creating jobs but also positioning the country as a global manufacturing hub," one of the officials said.
“By aligning manufacturing clusters with key infrastructure projects, the aim is to create seamless value chains that can attract both domestic and foreign investments, giving a significant boost to the economy." Also read | GDP slowdown? First estimate is not the last word The second official mentioned above said the government may also look to ease procedural hurdles, rectify tax anomalies, and recalibrate customs duties in the Budget for 2025-26. “The government is looking into measures (from a
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