Introduction
Under the aegis of the current government, "Make In India" initiative was launched in the year 2014. The main aim of the initiative was to uplift the lagging parts of the Indian manufacturing sector and thereby, boost the Indian economy up a notch. GOI, in order to further boost the initiative, introduced a slew of reforms that targeted the manufacturing, design & innovation and startup aspects of the Indian manufacturing sector.
Similarly, in 2020, when the global theater was under the dominion of the Covid-19 pandemic, the Indian government came up with the "Atma Nirbhar Bharat" campaign in order to provide further impetus to the Indian manufacturing sector and thus, initiate the growth of local manufacturing units and make the nation self-sufficient from an economic perspective.
The Indian state has huge potential to it when it comes to manufacturing as it has a diversified demographic that has cheap labor to it as well. and yet, in spite of such strengths, the presence of weak points like lack of large investments, the need to up-skill the workforce and many more have prevented the Indian manufacturing sector from soaring in the high skies.
Current Scenario of the Indian Manufacturing Sector
Manufacturing is one of the many industries that has immediate multiplier effect on the economy of a nation-state. This being said, India has the fifth largest manufacturing base in the world and yet the multiplier effect has to still take root in the Indian market space.
In 2021, the Government of India, came up with the second quarter report of the Quarterly Employment Survey. As per the survey conducted by the Government of India, the manufacturing sector provides for almost 39 per cent of the employment generated in the various sectors of the Indian economy.
The Medium, Small and Micro Enterprises (MSME) sector generates around 45 per cent of the manufacturing output in the Indian market. The reason behind the huge manufacturing output, when it comes to the MSME sector, is due to the presence of a vast human capital readily available across the length and breadth of the Indian populace and thereby, provide a tremendous amount of advantage to the firms engaging in the sector.
With the passage of times, many sectors in India's overall manufacturing sector have a gained a name for themselves. Textiles and apparels, drugs, pharmaceuticals, automobile are some of the Indian manufacturing sectors that have gained prominence over a long period of time. And still, in many aspects the Indian manufacturing sector is lagging and is waiting for someone to pick it up.
When Push comes to Shove
The Government of India, in its many iterations has tried to provide support in one form or another to the manufacturing sector so as to uplift it and provide the populace with some form of employment. During the ongoing reign of the current government, there have been various initiatives introduced into the manufacturing sector, so that heart keeps on pumping the economy. For instance: in 2020, the Indian Government came up with a report of the task force on National Infrastructure Pipeline (NIP) for 2019-2025. The Honorable Prime Minister of India, in his 2019 speech, has clearly stated that over the course of next five years, the Indian government will be injecting over 100 lakh crores into the development of the infrastructure of the nation which includes the manufacturing sector as well.
Similarly, the Government of India has come up with various Infra Development Programs whose main aim to provide the necessary impetus to the Indian manufacturing sector. In order to increase and save capital, the government has allowed the MSMEs to manufacture products in their warehouses so that the MSMEs get all the attention they can grab, both within domestic and international markets. Allowing MSMEs to manufacture in their warehouses allows for a reduction in delivery time and lessens the stress on the global supply chain process.
The manufacturing sector is dynamic by nature and in order to promote dynamism, the Indian government, at times, has trimmed the bushes so that the sector doesn't lose out to statutory laws like the Customs Rule.
Coming down is easy, Going up is difficult
The manufacturing sector, like any other sector, has its own share of issues and problems that need to be dealt with in an immediate manner. For instance, the sector has a serious case of factories that are not certified to either Indian or international standards for manufacturing. This lack of certification has made many investors take their capital to China.
Unlike its competitor, China, India is still stuck at a nascent level with much of the focus being on labor-intensive manufacturing and such lack luster behavior is having a huge impact on the Indian economy that is in desperate needs of millions of jobs and consumers.
The development of the modern state of India is being carried out on weak infrastructure that requires immediate upgrades so as sustain the economy and provide a direction to the ever mushrooming populace. The present Indian infrastructure contributes approximately 3 per cent to the Indian GDP in comparison to the other nations (comparison is an unhealthy pastime of many individuals).
One of the major point that has a huge impact on the manufacturing sector is the lack of required power supply to the Indian units. India, as a nation, is marred with power cuts and given its geographical nature, power cuts in India only add to the woes of the populace. The presence of poor and erratic power supply has had a huge impact on the working of the manufacturing sector and will continue to the woes of sector if drastic steps are not taken/initiated.
Lastly, India is land of many things which includes schemes as well. The Indian Government cannot be matched for when it comes to the introduction of various schemes and policies for uplifting the downtrodden. However, the impact of these schemes is very hard to locate as most of the populace are unaware of such said policies in the very first place. Due to the lack of implementation, many of the policies are just there on the paper and not on the ground.
One piece at a time
To boost the manufacturing sector is of paramount importance and in order to do so, the government needs to be proactive. For instance, the GOI has to follow a pincer formation wherein its attacking the issue at hand from all sides possible. Introducing large scale investments in sector has the ability to boost the rate of employment and initiate huge growth related opportunities. More investment in the sector can also lead to a reduction in the logistics involved within the sector.
Through the aid of policy, necessary skills need to be imparted on the workers involved and those with the necessary advantage should be given a boost as well when it comes to skill development. Apart from boosting the skill levels of the working force, a boost in terms of access to finance for the firms involved can go a long way as well.
In order to generate more employment in the sector, certain aspects of the import-export policies of the Indian state can be tweaked in order to provide maximum benefit.
As mentioned before, India is a land of policies and schemes. However, the impact of these policies announced by each passing second need to reach the populace and the reason behind this is the presence of casualness in the policy implementation section of the GOI. The rise of policy implementation deficit needs to curbed in order to reduce the burden on the manufacturing sector.
Money runs the world and in India, apart from money, you also power to run the country. Thus, it becomes the duty of the GOI to weed out the irregularities in the system and provide the entrepreneurs of today and tomorrow with stable, low and uninterrupted power supplies.
Individuals are different and have different requirements. Similarly, states within the Indian territory are different as well and have their own requirements as well. Many of the Indian states have huge tracts of lands available to them and thus, can contribute to the rise of the manufacturing sector and yet are unable to do so. Therefore, state specific strategies need to be created and implemented in order to grease the wheels of the Indian economy.
Lastly, as mentioned before, improving skills of the Indian workforce will go a long way. In order to do so, the quality of teaching in our schools and colleges need to be improved. One of the ways to do so is through the provision of vocational training courses which has been mentioned in the New Education Policy, 2020 as well.
To conclude, there needs to be a policy related approach for the Indian manufacturing sector so as to create a conducive environment for the influx of investments, creation and development of modern and efficient infrastructure and open up new avenues in order to secure capital, both domestic and foreign.
