Way back in 2015, the Modi government while unveiling its 'Make in India' initiative had vowed to transform India into a global manufacturing hub, and boost the manufacturing sector's share to 25 percent of the nation's GDP by 2022. Five years later, that goal remains elusive.

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According to data from the World Bank, India's manufacturing sector contributed a little over 13 percent in 2019. The sector's share to GDP in the last 10 years has hovered around the 15 percent mark. To make matters worse, the COVID outbreak and the subsequent lockdown took a toll on the sector as well.

According to data monitoring firm CMIE, this fiscal, the manufacturing sector would stand to see the lowest investment since 2006-2007.

The government has already swung into action to give a renewed push to the manufacturing sector. It has announced a production-linked incentive scheme for 10 sectors, including automobiles, pharma, telecom, and networking products. But, is that enough to revive the sector?

Is the PLI Scheme enough to propel Indian manufacturing and what can the finance minister do in the upcoming budget? To discuss this CNBC-TV18’s Shereen Bhan talked to R Mukundan, MD and CEO of Tata Chemicals and chairman on the CII's National CSR Committee; Martin Schwenk, MD & CEO of Mercedes-Benz India and, Ashish Bhandari, the MD & CEO of Thermax.

R Mukundan said, “This budget when we are entering, we are entering at a time where all the forces around the world are actually conspiring to make India a great manufacturing hub. I think the time has come, all the policies has been put in place and we need to know to stay the course. In terms of taxation, there are many little bits and pieces, like adjustment of GST rates across products and looking at some custom duties in some of the areas and these are minor tinkering to make sure that it is all aligned in one single bay.”

“One big area which government can also address is to extend this whole 15 percent tax regime which they had on the new companies which were getting into manufacturing that was going to have a sunset by 2023 because of pandemic many of us have not been able to invest during the year, maybe extending it by one more year would certainly help to make sure that those investment comes in.”

Ashish Bhandari said, “The comeback from COVID has been surprisingly positive on multiple fronts and a lot of the private investments which in India had stopped for a few years in between are also seeing a step up which is all very positive. The PLI scheme, in particular, is talked about quite a bit, I personally am quite bullish on this scheme, I think it is fantastic and because it gave tax break for new investment, it does not hurt the deficits and it is not a tax break in a sense.”

“Also fiscal discipline will be needed to manage inflation, to manage budget deficits so that the government doesn’t go overboard in spending in a way. My biggest thing would be how do you manage infrastructure spending, how do you manage funding on sustainability-related initiative, some of which were talked about while keeping fiscal discipline very much as the focus for the government.”

Watch this interview for more.

(Edited by : Bivekananda Biswas)