1.1 In the last two decades, Indian economy has witnessed a |
made sustainable, particularly ensuring environmental |
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transformational change and has emerged as one of the |
sustainability through green technologies, energy |
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fastest growing economies of the world. Industrial |
efficiency, and optimal utilization of natural resources and |
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development in Independent India was catalysed by three |
restoration of damaged / degraded eco-systems. |
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major industrial policy resolutions of Government of India |
1.8 Developments of Indian manufacturing sector calls for |
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in 1948, 1956 and 1991, which provided a strong industrial |
deepening and re-calibrating of economic reforms that |
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base. Economic reforms unveiled in 1991, have brought |
would strengthen the sector and make it grow faster and |
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about a structural shift enabling the private sector to |
become an engine of inclusive growth. |
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assume a much larger role in all sectors of economy.
However, the growth of GDP in India has largely been enabled by a dynamic growth in the services sector.
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1.9 Government of India decided to bring out the National
Manufacturing Policy to bring about a quantitative and qualitative change with the following six objectives:
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1.2 Though in the recent past, the growth of the manufacturing sector has generally outpaced the overall growth rate of the economy, at just over 16 percent of GDP, the contribution of the manufacturing sector in India is much below its potential. |
i. |
Increase manufacturing sector growth to 12-14 % over the medium term to make it the engine of growth for the economy. The 2 to 4 % differential over the medium term growth rate of the overall economy will enable manufacturing to contribute at least 25 % of the |
1.3 This situation is a cause of concern especially when seen in |
National GDP by 2022. |
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the context of transformation registered in this sector by other Asian countries in similar stages of development. The increasing gap in the sectoral share and the productivity of the manufacturing sector, between India and these economies, indicates that we have not been able to fully |
ii. Increase the rate of job creation in manufacturing to create 100 million additional jobs by 2022. iii. Creation of appropriate skill sets among the rural migrant and urban poor to make growth inclusive. |
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leverage the opportunities provided by the dynamics of |
iv. Increase domestic value addition and technological |
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globalization. |
‘ depth’ in manufacturing. |
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1.4 This also has attendant socio economic manifestations in |
v. Enhance global competitiveness of Indian |
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terms of over dependence of a large section of the |
manufacturing through appropriate policy support. |
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population on agriculture for its livelihood, disguised |
vi. Ensure sustainability of growth, particularly with regard |
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unemployment and urban unemployment. India has a |
to the environment including energy efficiency, optimal |
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favourable demographic profile with over 60 % of |
utilization of natural resources and restoration of |
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population in the working age group of 15-59 years. For a |
damaged / degraded eco-systems. |
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country with the largest young population in the world, this |
1.10 In order to achieve these goals:- |
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creates a challenge of significant magnitude. Over the next decade, India has to create gainful employment opportunities for a large section of its population, with varying degrees of skills and qualifications. This will entail creation of 220 million jobs by 2025 in order to reap the demographic dividend. The manufacturing sector would have to be the bulwark of this employment creation initiative. Every job created in manufacturing has a multiplier effect of creating two to three additional jobs in |
i.
Foreign investments and technologies will be welcomed while leveraging the country ' s expanding market for manufactured goods to induce the building of more manufacturing capabilities and technologies within the country; ii. Competitiveness of enterprises in the country will be the guiding principle in the design and implementation of policies and programmes;
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related activities. Therefore, a thrust on manufacturing is |
iii. Compliance burden on industry arising out of |
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integral to the inclusive growth agenda of the government. |
procedural and regulatory formalities will be reduced |
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1.5 Besides the employment imperative, the development of |
through rationalization of business regulations. |
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the manufacturing sector is critical from the point of view |
iv. Innovation will be encouraged for augmenting |
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of ensuring that the growth model of India is sustainable by |
productivity, quality, and growth of enterprises; and |
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providing value addition to our natural and agricultural |
v. Effective consultative mechanism with all stake holders |
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resources, addressing our strategic needs, and developing |
will be instituted to ensure mid-course corrections. |
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new technologies for the welfare of our citizens. |
1.11 The following industry vertical will be given special attention: |
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1.6 The relatively low level of‘ value-addition’ in the products |
i. |
Employment intensive industries: Adequate support will be |
manufactured in the country, and the growing imports of |
given to promote and strengthen employment intensive |
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capital equipment – the building blocks of a country’ s |
industries to ensure job creation. Special attention will |
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manufacturing competitiveness also needs to be addressed |
be given in respect of textiles and garments; leather |
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urgently. Acquiring depth in manufacturing is crucial from |
and footwear; gems and jewellery; and food processing |
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the stand point of long-term competitiveness in strategic |
industries. |
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areas of economy such as defence and telecommunication. It is important to have a strong indigenous value chain addition element from the stand point of national security |
ii. Capital Goods: A robust economic growth would necessitate a strong demand for capital goods. Such growth would create a strong and continuing demand for capital goods. The capital goods industry, which is |
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1.7 Finally, the growth of the manufacturing sector has to be |
the mother industry for manufacturing has not grown at |
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