Modi Govt's imperative for employment growth

The Indian manufacturing sector, envisioned to be a significant job creator and a means to boost the economy, has fallen short of its potential, leading to a rise in unemployment among the youth. Despite India’s status as a rapidly growing economy, the manufacturing sector’s contribution to GDP has remained stagnant at 15-17%, significantly lower than that of East and South-East Asian countries.

Factors such as a high tax burden, excessive regulatory compliances, inadequate infrastructure and connectivity, unreliable electricity, lack of access to credit, and an insufficient focus on research, development, and technology adoption have contributed to this stagnation. However, Indian manufacturers are increasingly seeking to align with the nation’s goal of becoming a global player.

To address these challenges and unlock the sector’s full potential, the new government needs to implement a new industrial policy. Areas of focus include addressing the gaps in sectors such as automobiles, pharmaceuticals and chemicals, textiles and apparel, engineering goods, farm-implements, and bicycles. It is also necessary to reevaluate the effectiveness of the Production Linked Incentives (PLI) scheme and consider a restructuring of the Goods and Service Tax (GST) system.

Opportunities exist in next-generation sectors such as renewable energy, aerospace, and high-tech manufacturing. Building a solid foundation in these sectors requires a focus on R&D, investments in technology transfers, global tie-ups, and incentivizing investments. Additionally, there is a need for a smart manufacturing stack, which includes the development of smart industrial clusters, connected factories, and tech-enabled interventions.

Accelerating future-ready infrastructure, reducing logistics costs, and addressing the transition of the workforce from agriculture to manufacturing are other crucial areas. The government needs to prioritize skill development and industry leaders should play a significant role in driving this initiative.

To ensure India’s success as a global manufacturing hub, a thriving and self-reliant domestic manufacturing sector is essential. The government must deliver on its promises and implement an aggressive and effective reform agenda to navigate geopolitical risks and climate change-driven calamities. With the right strategies in place, India has the capacity and resources to excel in this area and achieve inclusive growth.

.st1{display:none}See more