India's economy has taken a significant stride in past two decade. It is now time to build on the economic gains and tackle the barriers to growth. India needs to generate more jobs for its bustling youth and create economic opportunity for all. India's GDP has seen a dominance from service sector. BFSI and IT have been the respected jobs in India. India's manufacturing contribution is low at 17% as of 2014 to GDP. To reverse the situation, India is planning to build prosperity corridors along its highways, rail lines and sea ports. Economic corridor development entails constructing world class infrastructure typically aligned to major transport system; connecting smart cities and industrial zones.
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| 3,115 cars of General Motors and 3,093 Volkswagen cars were exported to Mexico in a single ship from Mumbai port. |
The government of India announced National Manufacturing Policy with the objective of increasing Manufacturing to GDP share to 25% and creating 100 million jobs by 2022. PM Modi launched Make In India campaign in 2014 in aim of wooing global manufacturing companies. The Make In India initiative comprises of 25 industries which range from defence to small cars. Attention is being given to Ease Of Doing Business ranking. The government is successful in passing labour reforms, GST, Insurance Bill, Coal Mines and Mineral bill. Investments by FDI has been increased in all sectors except single brand retail. To spread the benefit of economic growth to 126 billion Indians, India must further develop the manufacturing sector.
10 Things to Know about Manufacturing in India
1. India is the world's third largest economy and has emerged as a global growth engine. India is also the fastest growing major economy with the GDP growth rate of 7.6% in FY16.
2. India's service sector has been the driver of country's economic growth, and is a major contributor to India's GDP. India is a major exporter of information technology, business outsourcing and software expertise, thanks to its smart engineers.
3. Services are the most dynamic aspect to Indian economy but the sector employs less than one third of India's population.
4. While services have been booming in Asia, manufacturing has lagged. India’s manufacturing makes up around 17% of gross domestic product, compared to Malaysia at 24% and Thailand at 33%.
5. India’s manufacturing sector is hamstrung by poor roads and unreliable power supplies; burdensome regulations, limited access to land and credit, and a lack of a workers skilled in high-end manufacturing.
6. To spread the benefits of economic growth to the poor, India must further develop the manufacturing sector. India is seeking to increase manufacturing’s share of gross domestic product to 25% and create 100 million jobs within a decade by simplifying regulations, improving infrastructure and providing other incentives.
7. The government is also promoting the Make in India initiative, which seeks to encourage global firms to set up manufacturing bases in India by offering tax incentives and simplified regulations.
8. The Delhi Mumbai Industrial Corridor is the world's largest infrastructure project. The governments hopes that such industrial corridor will contribute more than 25% to India's GDP. The DMIC project will have 2 power plants, 24 smart cities, 23 industrial hubs, 2 ports and six lane expressway of 1,500 km connecting Mumbai to Delhi. JICA has assured a funding of $4.5 billion.
9. The government also plans to build Mumbai - Bengaluru, Bengaluru - Chennai, Chennai - Vizag, Kolkata - Amritsar economic corridors. Work on DMIC has been started and other corridors are in executing stage.
10. A healthy manufacturing economy requires good roads, electricity and logistics facility. India plans to build 1,000 km in current year. India will also build 6 new mega ports under the Sagarmala project. The total investment in Sagarmala project is expected to be Rs 5 lakh crores.
- Chaitanya Kulkarni
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