Manufacturing competitiveness yields growth, jobs and resilience

Paper: GS – III, Subject: Economy, Topic: Industry and Industrial Policies, Issue: Strengthening Manufacturing sector base.

Context:

India is at a strategic moment in its economic journey amid global supply chain realignment. Manufacturing can become a growth engine, generate employment, and enhance resilience which is critical to the Viksit Bharat (Developed India) vision and national security.

Key Highlights:

Manufacturing Sector’s contribution to economy:

• Growing middle class, young workforce, and resource base.
• Needs policy reforms and targeted interventions to fully realize potential.

Five-Pillar Strategy for Manufacturing Competitiveness:

1. Empower the National Manufacturing Mission:

Objective:

• Raise manufacturing share in GDP to 25%.
• Scale up merchandise exports to $1 trillion by 2030.

Implementation:

• Operationalize Manufacturing mission with a cross-   ministerial action-oriented plan.

Impact:

• Create jobs at scale.
• Emphasis on Three-tier governance model, Outcome-based oversight and Time-bound implementation.
• Bridge the Missing Middle in Capital Access:
• Objective: Enable technology upgrades for global competitiveness.
• Challenge: Small and mid-sized enterprises (SMEs) struggle with financing.
• Ways to materialise:
• Use fund-of-funds model to support mid-sized firms (₹200 crore–₹1,000 crore turnover).
• Leverage successful startup funding models.
• Accelerate Industrial Infrastructure Development:
• Objective: Develop a world-class national framework for land acquisition.
• Focus on:
• Environmental and legal clearances.
• Smart industrial cities near major corridors.
• Efficient logistics & utilities.
• Ways to materialise:
• Partner with states such as Andhra Pradesh, and Maharashtra to scale infrastructure like Sri City and Auric.
• Attract anchor investors for cluster-based manufacturing.
• Rationalize Tariffs and Power Costs:
• Challenge: High input costs remain a major bottleneck.
• Reforms needed:
• Rationalize tariffs.
• Eliminate cross-subsidization.
• Enhance power cost-efficiency.
• Expand national infrastructure connectivity:
• Use Dedicated Freight Corridors, Industrial Corridors, and East-West, North-South economic corridors.
• Smart Manufacturing and Digital Readiness:
• Industry 5.0: Focus on AI, robotics, automation, analytics.
• Implementation through:
• National Digital Manufacturing Framework.
• Develop Centres of Excellence for Industry 4.0.
• Leverage tools like digital twins, real-time analytics, and AI-driven design/manufacturing.

Conclusion:

• India must grab the opportunity to:
• Become a global manufacturing hub.
• Reach $1 trillion exports.
• Enable $30 trillion GDP economy by 2047.

https://www.livemint.com/opinion/online-views/india-manufacturing-supply-chains-industry-5-0-ai-robotics-infrastructure-logistics-exports-gdp-growth-viksit-bharat-11752588146330.html

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