Mains Daily Question
March 1, 2023

Despite the fact that India has the fifth largest GDP in the world, its manufacturing sector lags behind. In this context mention the steps taken by the Indian government to boost manufacturing in India. Also, suggest the way forward. 

Model Answer

Introduction: Describe the traditional scenario of manufacturing in India.

Body: Mention steps taken by the government to promote manufacturing.

Conclusion: Suggest a way forward.

Answer:

Traditionally, the manufacturing sector occupied a low position in the Indian economy. However, with liberalization and globalization, the government realized the potential of the manufacturing sector. Hence, it started promoting manufacturing in India. However, it still contributes hardly 30 percent to value addition compared to the service sector's 55 percent. Thus, multiple steps have been taken to promote it.

Steps that the Indian government took to promote manufacturing in India:

  1. The "Make in India" campaign was launched in 2014 to promote domestic manufacturing and attract foreign investments. 
  2. Implementation of the Goods and Services Tax (GST) in 2017 to simplify taxation and enhance business efficiency. 
  3. increased limits on foreign direct investment (FDI) in a variety of sectors, including defense, railways, and insurance.
  4.  Implementation of the National Manufacturing Policy in 2011, with the objective of increasing manufacturing's share of the GDP to 25% 
  5. To finance infrastructure projects, the National Investment and Infrastructure Fund (NIIF) was established in 2015.
  6. Utilize initiatives such as Bharatmala, Sagarmala, and UDAN to improve the infrastructure and connectivity.
  7. Rationalization of labor laws by consolidating and streamlining existing laws.
  8.  Establishment of specialized manufacturing zones, including special economic zones (SEZ) and national investment and manufacturing zones (NIMZs).
  9.  Initiate the Production Linked Incentive (PLI) program in 2020 to encourage domestic manufacturing in various industries. 
  10. Initiatives such as the Atal Innovation Mission and Make in India, promote innovation, research, and development. 

Way forward to promote manufacturing in India:

  1. Invest more in research and development to stimulate innovation in manufacturing. Example: The Atmanirbhar Bharat Abhiyan initiative, launched by the government in 2020, aims to increase domestic manufacturing and research.
  2. Reduce regulatory burden and business-friendliness to increase foreign investment. Example: India's ranking in the Ease of Doing Business index rose from 142 in 2014 to 63 in 2019.
  3.  Promote the development of manufacturing clusters to increase productivity and competitiveness.
  4. Increase the manufacturing sector's access to credit through initiatives such as Make in India" and Stand Up India. 
  5. Focus on skill development and training programs to increase workforce productivity. The 2015-launched National Skill Development Mission aims to train 40 billion Indians in various skills by 2022. 
  6. Develop manufacturing-supporting infrastructure such as ports, roads, and logistics facilities. Launched in 2015, the Sagarmala project aims to develop ports and related infrastructure in India. 
  7.  Encourage public-private partnerships to promote government and private sector collaboration in manufacturing.
  8. Provide tax incentives and subsidies to encourage manufacturing sector investment. 
  9. Increase the use of digital technology in manufacturing processes in order to boost productivity and competitiveness.

If the government successfully promotes manufacturing in India, it can lead to job creation, increased exports, and reduced dependency on imports. This can also boost economic growth, improve living standards, and enhance India's competitiveness in the global market, ultimately leading to overall development and prosperity.

Subjects : Current Affairs
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