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The
National Common Minimum Programme of the Government of India 2004
had prescribed certain basic principles of governance which, among
others, seeks to ensure a growth of 7 to 8 percent in terms of
GDP. A high level of 8 to 10 percent GDP growth and providing
gainful employment annually to over eight million boys and girls
will be possible, only when the different elements of the economy
are competitive both in terms of quality and costs. In addition, a
careful balance has to be maintained between the three segments of
the economy – agriculture, industry and services.
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The
share of "manufacturing" in the GDP had remained
stagnant for over 15 years since 1990 at around 17 per cent which
should be raised to 30 to 35 per cent of the GDP by year 2020.
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Keeping
this objective in mind the NMCC has brought out "National
Strategy for Manufacturing – 2006" which is intended to
serve as a guideline for future work. The problems specific to
each of the sub-sectors of the industry, such as textiles,
garments, leather, food processing, automobiles, advanced
technology products etc. are to be addressed.
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There
is need to improve the competitiveness of the Indian industry to
take full advantage from emerging opportunities in the
manufacturing sector in the context of globalization and also
ensuring a balanced and sustained growth of Indian economy.
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India’s
share in the global trade is less than 1% which is much below the
potential. Manufactured goods form three-fourths of all exports
from India. Five manufacturing sectors viz., Gems and Jewellery,
Textiles, and Garments, Engineering Goods, Chemicals, Leather and
Leather Goods account for over 75% of India’s manufacturing
exports. The two trading blocks, US & EU, receive more than
50% of exports from India. Thus, the manufacturing sector is
crucial for the overall growth of the economy as well as for
providing jobs to the large workforce entering the job market
every year, particularly from the rural areas.
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India
has to aim at achieving a long term GDP growth rate of 8 to 10 per
cent to substantially improve the living conditions of its people.
For achieving a 12 percent growth rate in manufacturing, the
government needs to create appropriate conditions whereby there is
a consistent level of investment, both domestic and foreign, in
manufacturing and in infrastructure.
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Competitiveness
is a multi-dimensional concept that embraces the ability to
export, efficient use of factors of production and natural
resources, and increasing productivity that ensures rising living
standards of a nation. It depends on basically three sets of
factors all taken together, viz (i) the macroeconomic environment;
(ii) the ability to absorb, use, and develop technology to reduce
production costs, improve product quality, and innovate new
products; and (iii) marketing strategy and arrangements covering
such diverse factors as packaging; sales networks, and after-sales
service. These factors are intimately inter-related.
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For
ensuring manufacturing competitiveness, macroeconomic stability is
essential. Need for reduction of domestic indirect taxes both from
point of boosting domestic demand as well as improving export
competitiveness. Procedures connected with export
incentives/subsidies continue to be cumbersome. These need to be
simplified on a priority basis.
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If
Indian manufacturing sector has to grow at around 12 percent per
annum, it will be necessary for the education and training system
to produce at least 1.5 million technically skilled people every
year.
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Government
should consider establishment of technology parks around
institutions of higher technological learning on the lines of
those existing in USA.
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High
speed road and rail corridor projects connecting respective
hinterlands to the ports should be taken up on priority.
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It
is necessary that the Centre as well as the States act in a
coordinated manner to create the necessary conditions for
investment and growth of the manufacturing sector.
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Small
Scale Sector should be encouraged as breeding ground for
innovation and technology development where it becomes the
technology sources for larger companies.
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Viable
programmes for improving the competitiveness of the un-registered
manufacturing sector should be designed and implemented.
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The
manufacturing sector can take advantage of the new IPR regime to
enhance its competitiveness for which capacity building and
facilitation would be required.
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A
Manufacturing Advisory Service should be established by the
Government to deliver practical help to manufacturing sectorn
