Need focus more on manufacturing sector to attain GDP growth target of 6.5%: RBI

In the backdrop of dwindling contribution of manufacturing sector to the GDP, Reserve Bank of India (RBI) Governor D Subbarao in his keynote to Centre for Economic and Social Studies urged India to focus more on manufacturing sector, since the sector has the capacity to aid India achieve the target of 6.5% GDP growth this fiscal.

With the poor performance of manufacturing and farm sectors, India's economic growth rate had dragged to 5.3% in the Q4 of 2011-12, marking lowest in nine years. The contribution of manufacturing sector for the fourth quarter was 0.3%, while it was 7.3% in the previous year same quarter.

Subbarao noted that the sector can create millions of jobs for people, who leave other sectors such as agriculture. But the biggest challenge is to innovate financial products that are long-term in nature, as the sector demands more credit facilities when compared to that of service industry.