Cheaper labour is not enough to drive the manufacturing growth and attract investors into the country as there are other factors like 'high power tariff' and 'tougher regulatory regime' which need attention, NITI Aayog Vice-Chairman Arvind Panagariya said as per the PTI report.
"We are much cheaper then China. Foxconn pays wages three to four dollar an hour... But that is not sufficient. That we can tell you from our own experience. There are also other factors," Panagariya said at a function.
Elaborating about other factors he said, "Power tariffs in India are very high. If the power tariff is relatively high then price (of product) will go up.
About the cheaper labour he thinks that labour margins (costs) per worker is low so that it could not be the only advantage to attract big investors in the country.
Panagariya also explained about other impediments like tougher regulatory regime which is hampering exports. As per his view, exporters have to seek a large number of clearance before exporting a product from India.
He is of the view that more investors would invest here in manufacturing plants for exports only when there would be conducive conditions.
Panagariya also opined that GST (Goods and Service Tax) will help in accelerating growth as redesigning the tax system for improving efficiency is required.
He observed that the manufacturing is heavily taxed but services are not in India.
He hoped that more quality jobs will be created with more investments coming in India like Foxconn which has planned to set up manufacturing facility.