What policies are needed to make India a Manufacturing Hub

India’s several industries have realized the drawbacks of being excessively dependent on manufacturing on a single country and are looking to expand the geographic spread of their facilities. In order to do this India has to present itself as a viable alternative manufacturing destination. It needs to act proactively to create an environment that is favorable to global manufacturing so that once the COVID 19 crisis blows off, international organizations can look at us as a trusted supply chain partner.

As manufacturing plays an essential role in the economy of a nation, the device to transform India into a manufacturing hub, PM Narendra Modi launched the Make In India Initiative on 25th September 2014. The project aims to attract businesses from around the world to invest and manufacture in India. It can facilitate greater foreign investment, boost the set of manufacturing skills like mining, producing raw materials, agriculture-related goods, textile, apparel, and electronics manufacturing, etc.

The government has identified some sectors which have the possibility of making it happen such as automobiles, defense manufacturing, chemicals, IT, pharmaceuticals, textiles, ports, aviation, leather, tourism and hospitality, wellness, railways, etc. They have enormous growth potential and need investment to grow. Though all sectors are important for the economic growth of the country, the manufacturing sector needs to increase as it has the capability, inclination towards innovation, and the skill sets, to develop state-of-the-art manufacturing facilities in order to deliver the best quality products at competitive prices.

Policies such as that related to poverty alleviation, unemployment, upskilling the labor force, achieving fiscal consolidation, increasing manufacturing competitiveness, implementing social welfare schemes, etc. could be implemented to ensure that the benefits percolate to the grassroots-levels.

Of Late the major concerns of industrial policies have shifted on encouraging private sector participation in infrastructure projects, simplification of rules & procedures, creating incentives for large projects, timely delivery of services, use of Information & Communication Technology (ICT) for hassle-free and timely approvals, research & development, technology up-gradation & modernization, and strengthening of Small & Medium Enterprises (SMEs) through cluster development.

Some initiatives already taken by the government pertaining to Make in India include:

  • In March 2020, the Union Cabinet approved financial assistance to the Modified Electronics Manufacturing Clusters (EMC2.0) Scheme for the development of world-class infrastructure along with common facilities and amenities through Electronics Manufacturing Clusters (EMCs).
  • In February 2019, the Union Cabinet passed the National Policy on Electronics (NPE) which envisaged the creation of a $ 400 billion electronics manufacturing industry in the country.
  • The Government of India launched a phased manufacturing program (PMP) aimed at adding more smartphone components under the Make in India initiative thereby giving a push to the domestic manufacturing of mobile handsets.

Post Covid-19 the government needs to take into account the following to continue making India a manufacturing hub:

  • More focus on expanding social infrastructure going forward and fields such as biotechnology and biochemistry would get a boost, while online content writers would be very much in demand.
  • The government’s top priority should continue to be the health of the people and to feed the masses.
  • Ensure continuously and enough liquidity both for the consumers and producers of goods and services
  • Retain lower interest rate regime, stay nimble and act quickly as and when a sector starts showing any stress
  • Special revival packages in the form of interest subvention, subsidy for repairing the impaired assets, reduction in taxes, including GST and other levies as hospitality, transport, airlines, and exports are being crushed by the health crisis, etc.

Overcoming these hurdles will be a herculean task for the government but if done well, it could reap huge benefits for India in the coming years.

Contributed By- Umme- Aiman Rampurwala, Content Writer @ Mitti Ke Rang

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