The manufacturing sector has the scope for creating jobs for millions of people who leave other sectors such as agriculture, said RBI Governor D Subbarao.
India's economic growth rate slipped to 5.3 per cent in the fourth quarter of 2011-12, the lowest in nearly nine years, following poor performance of the manufacturing and farm sectors. During the quarter ending March 31, growth in the manufacturing sector contracted to 0.3 per cent, from 7.3 per cent in the corresponding period of 2010-11.
"Every unit of manufacturing needs more credit than for every unit of services output to GDP. And we need to be focussing on manufacturing because you cannot accelerate growth from the current level of 6.5 per cent...without focus on manufacturing," Subbarao said.
"You cannot provide jobs to hundreds of millions of people who are released by agriculture sector and other sector unless you focus on manufacturing," he added.