future economy

How India Must Focus On Manufacturing For A Better Economic Future

Developing nations such as India have been severely affected owing to the recent pandemic, which has opened our eyes to a major imbalance in the development of industries. Over the last decade the country has primarily focused on the service sector, which has grown rapidly and created viable employment. However, manufacturing, as an industry needs that robust push. For over 30 years now, India’s manufacturing has remained at a static 16 per cent of the country’s GDP, and that needs to change. Rana Kapoor, the CEO of Yes Bank had said, “Manufacturing sector holds immense potential, not only to contribute to the nation’s growing economy, but also to provide employment to lakhs of Indians, and reduce our dependence of imported goods.” He pointed out some essential plans which must be utilized to make India a manufacturing hub:

The National Manufacturing Policy

In 2011 the National Manufacturing Policy (NMP) was launched with an aim of improving it by 12-14 per cent to increase the manufacturing sector’s contribution to the country’s GDP to 25 per cent by 2022. Rana Kapoor said “this is estimated to effectively create 100 million new job positions in the manufacturing sector”. The primary focus of this policy is on industries that produce capital goods, are employment-intensive, and have strategic significance to the economy. Micro, small and medium enterprises (MSMEs) and public sector enterprises will be under special radar for development and growth. In order to promote manufacturing, national investment and manufacturing zones (NIMZs) will be created under this policy.

Make In India Approach

The Prime Minister’s Make in India campaign is a landmark incentive to promote the manufacturing sector of India and boost the entrepreneurial culture of the country. Yes bank, under the visionary Rana Kapoor, was one of the earliest contributors to this campaign, with its support for India’s MSMEs. The bank has offered multiple training, orientation and learning programmes to offer necessary resources to entrepreneurs, along with easy loans for viable business ideas.

Rationalizing Labour Laws

Labour is the strength of the manufacturing Industry and to offer them a work environment that encourages growth it is necessary to rationalise the 44 central labour laws and around 160 State labour laws into four wide categories: industrial relations, wages, employment standards, social security. Rana Kapoor stressed on the importance of flexible labour. They help in striking a healthy balance between the welfare of workforce and the needs of the industry, therefore, creating a work culture that boosts profit, while simultaneously creating a thriving environment for employees to excel and reach their best potential.

Land Acquisition Act

Land is a crucial factor for the growth of infrastructure and industry, and to facilitate that the authorities need to revisit the Land Acquisition Act. Rana Kapoor put forward a few propositions on relaxing of norms in the act to allay the present issues faced by industry. Land banks can also be created across the states and the existing ones need to be expanded to designate areas for industrial development.

FDI policy

In order to develop the manufacturing expertise of India in the long run, there is an immediate need to boost overseas investments, which can be promoted by relaxing the existing FDI policy to meet the interests of the industry. Integrating the country’s foreign trade policy with ‘Make in India’ campaign will be of help in strengthening the manufacturing base of multiple industry segments with high domestic value addition, which include textiles, electrical goods, and more.

Industry Academia Partnership

Along with infrastructure and technology, learning resources are crucial to develop human resource capabilities. Industry training and industrial apprenticeship programs, in collaboration with the ITIs of the country can be rolled out to improve knowledge and productivity and offer the youth of the county a scope for viable employment. Industry-academia partnership will go a long way in building a vibrant domestic R&D development and nurturing design and innovation ecosystem in the country.

Rana Kapoor believed manufacturing is the next big revolution India needs. While government bodies have now refined many policies, non-government institutions can also help with funding, resources and create a nurturing ecosystem that helps the manufacturing industry thrive and contribute to the Indian economy.

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