The Finance Minister was critical of RBI Governor Raghuram Rajan's opinion on Make in India initiative.

Rejecting RBI Governor Raghuram Rajan’s criticism of ‘Make in India,’ Union Finance Minister Arun Jaitley said on Monday that it was not relevant whether the programme was for consumers within or outside India.

Mr. Jaitley was speaking at the opening session of a daylong workshop on ‘Make in India’ organised on Monday by the Department of Industrial Policy and Promotion.

The principle, he said, was that consumers across the world liked to purchase goods and services which were cheaper and of good quality. He criticised the RBI for its anti-inflationary monetary stance of keeping interest rates unchanged and blamed this for the slowdown of the manufacturing sector. “Cost of capital is one singular factor that has contributed to lower manufacturing growth.”

However, to revive the sector, the government was planning a number of steps, including streamlining of the dispute resolution mechanism and the removal of bottlenecks in the complex procedure in land acquisition. “Entry point has to be eased, initial barriers [have to be] lowered and removed, and after entry, an enabling environment has to be created.”

In October, the latest month for which official data on factory output are available, industrial production contracted 4.2 per cent. Down 7.6 per cent, the manufacturing output was what had dragged down the sector.

Speaking in New Delhi earlier this month, Mr. Rajan sought to nuance Prime Minister Narendra Modi’s ‘Make in India mantra’ by suggesting that the government would have to look for regional and domestic demand for growth — to make in India primarily for India. Since the global economy was still weak, he argued, it would be much less likely to be able to absorb substantial additional imports from India in the foreseeable future, making ineffective an export-oriented strategy for growth. As the industrial world stagnated, many emerging markets were rethinking their export-led growth model, he said.

Also speaking at the inaugural session, Commerce and Industry Minister Nirmala Sitharaman said the workshop was a unique initiative. “Nothing of this scale has been attempted in recent memory... This national workshop is aimed at getting industry and government on the same platform.”

The workshop had 18 sessions, in which 25 Union ministries and all the States held discussions with industry leaders to work out a road map and short and medium-term plans under ‘Make in India.’ These were discussed with the Prime Minister at the end of the day.

Union Mines, Steel and Labour & Employment Minister Narendra Singh Tomar said ‘Make in India’ was aimed at bringing all stakeholders together to make the country business-and-industry-friendly and attract investments, domestic as well as foreign.

Cabinet Secretary Ajit Seth underlined the need to create an atmosphere in which investment was the main driver of economic growth.