New Delhi: Finance Minister Arun Jaitley on Tuesday said infrastructure sectors like coal, power and cement have been recording double digit growth in the last few months, whereas reviving manufacturing growth remains a major challenge.
"Reviving manufacturing, diversifying its base and equipping it for robust long-run expansion is one of the major challenges of our economic management," Jaitley said in his opening remarks during the pre-budget meeting with representatives of trade and industry.
"We still have a lot of distance to cover," he added.
Stressing that reform measures undertaken by the government in coal, insurance and land acquisition would make a major difference in boosting the economy, Jaitley said implementation of the Goods and Services Tax (GST) is expected to improve tax administration and would help in bringing more transparency in the system as well as ensure smooth flow of goods.
"We are working on a task given by the prime minister to improve India's ranking on the ease of doing business index," he added.
Industry body Federation of Indian Chambers of Commerce and Industry (FICCI) urged the government to move away from the aggressive revenue approach and provide a conducive tax environment.
Ficci president Jyotsna Suri urged Jaitley to strive to create a conducive tax environment and suggested that revenue estimates and targets should be realistically arrived at in accordance with the state of the economy.
"Revenue generation is primarily dependent on the economic activity in the country; revenues cannot be enhanced by prescribing artificially high targets for the tax officers," she said and also stressed the need for bringing down the high cost of capital which has emerged as a major hurdle in Indian industry's competitiveness.
"Reduction in interest rates will give a boost to demand (for housing and consumer durables) as well as investments (especially for micro, small and medium enterprises) which will have a spiralling effect on overall investment and growth cycle," she said.
FICCI said that it expects the Reserve Bank of India (RBI) to consider easing the monetary policy as inflationary pressure was coming under control.