Issues of Manufacturing Sector in India

Issues with Manufacturing sector
  • According to NITI Aayog’s report, the sector’s growth rate has remained constant for the past 25 years
  • Whereas countries such as Taiwan and China recorded more than double the rate of expansion in India
Around the world:
  • In Taiwan and South Korea in the 1960s and 1970s and in China in the 1980s, 1990s and 2000s, manufacturing grew at rates approaching or exceeding 15 per cent
  • It lead to transformation of these economies from primarily agrarian and rural character to modern urban ones in around three decades
Scenario in India:
  • The fast-growing sectors in India have been automobile and its parts, two-wheelers, machinery, chemicals, petroleum refining, telecommunications, software and pharmaceuticals
  • None of these sectors employs low-skilled workers in large numbers
  • As a result, the vast majority of Indian workers remain concentrated in agriculture, unorganised industry or low-paying services
Challenges in front of India
  • To achieve rapid growth in manufacturing sector
  • Ensuring healthy growth in labour-intensive sectors such as clothing, leather manufactures, food processing and electronic assembly
  • Growth in these sectors would help create good jobs for workers with limited skills
  • Suggestions by the NITI Aayog in its three-year action plan
  • Easing entry barriers and reducing duties on synthetic fibres to make India’s apparel industry competitive in global market
  • Reducing custom duty on gold
  • Increasing investment in skill training
  • Expediting creation of integrated mega food parks and lower duties on key inputs of final electronics products

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