E-BOOK : Yojana Magazine, April 2015

CONTENTS

MANUFACTURING IN INDIA: NEW PERSPECTIVES AND IMPERATIVES
P M Mathew ............................................................................................................. 6

MANUFACTURING-LED GROWTH, COMPETITION AND CHALLENGES Arup Mitra ............................................................................................................. 13

NEED FOR SUSTAINABILITY AND INNOVATIONS IN INDIAN MANUFACTURING
Balkrishna C Rao ................................................................................................... 18

PARTICIPATION IN GLOBAL PRODUCTION NETWORKS FOR “MAKE IN INDIA”
C Veeramani ........................................................................................................... 22

THE NEED FOR ‘MAKE IN INDIA’
Kasturi Chakrabarty, M Mishra ............................................................................. 27

SPECIAL ARTICLE

LEGAL AID IN INDIA AND THE ROLE OF
NATIONAL LEGAL SERVICES AUTHORITY (NALSA)
Manoj Kumar Sinha ............................................................................................... 32

LABOUR LAWS AND INDIA’S MANUFACTURING SECTOR: THE NEED FOR REFORMS
Devashish Mitra ..................................................................................................... 35
 
HI-TECH MANUFACTURING IN INDIA: AN UNLEASHED POTENTIAL
Anand Sharma, Veerpal Kaur................................................................................. 41

INTELLECTUAL PROPERTY ISSUES IN FAST MOVING CONSUMER GOODS (FMCGS) IN INDIA
Ashwini Siwal ........................................................................................................ 48

LINKAGES WITH FORMAL SECTOR AND ACCESS TO CREDIT
Ajit Kumar Jha, Sanjoy Saha ................................................................................. 51

NORTH EAST DIARY....................................................................................... 56

START –UPS: CONSTRAINTS AND POLICY REQUIREMENTS
Manoj K Das .......................................................................................................... 57

NEW SERIES ON NATIONAL ACCOUNTS: WHY MANUFACTURING SECTOR LOOKS BETTER AT REVISED BASE?
Jitender Singh......................................................................................................... 62

DYNAMICS OF INTERNATIONAL AND DOMESTIC OIL PRICING
Hiranmoy Roy, Anil Kumar, Vijay Shekhawat ...................................................... 64

Scope for Growth

Manufacturing industry is of significant importance to the development of any economy. Developing countries like India largely depend on manufacturing industry for growth and employment.

Indian economy which has traditionally been agriculture based, is taking big leaps towards promoting manufacturing which constitutes 16 per cent of GDP in India. But, its contribution to employment sector and growth is well below its true potential. Restrictive and rigid labour laws, abundance of unskilled workforce over skilled workforce, lack of technology innovations are some of the factors contributing to this.

Diversity of resources and the varying degree of skills and qualification of the available labour makes it essential to understand the importance of both the small as well as large scale industries. The small-scale sector, largely dependent on the strengths of our traditional skills and knowledge, creates largest employment opportunities, next only to Agriculture. It also helps in alleviation of poverty and brings about equitable distribution of income and wealth. At the same time the large scale industry, apart from providing job opportunities, plays important role in promoting exports resulting in increased foreign exchange earnings and expanding demand base for domestic products leading to overall inclusive growth.

National manufacturing policy aims at enhancing the share of manufacturing in GDP to 25 per cent within a decade and creating 100 million jobs. It also seeks to empower rural youth by imparting necessary skill sets to make them employable. The recent budget of the Government has made efforts to provide favourable environment and facilities to promote domestic as well as international industry by simplification, rationalization and digitization of processes. Initiatives like “Make in India”, Skill India, MUDRA etc are aimed at encouraging the spirit of entrepreneurship and making India the manufacturing hub of the world. The budget also tries to address issues
relating to lack of robust infrastructure, constraints on energy supply, importance of innovation and technology etc.

The articles inside take a look at what has been done so far and what more needs to be done to give much needed impetus to the sector.

To conclude, one can say that manufacturing sector has the potential to play a crucial role for India to achieve its goal of becoming the fastest growing economy in the world. And the right mix of strong commitment from the government as well as the industry can make this a reality.

Manufacturing in India: New Perspectives and Imperatives

NADEQUATE GROWTH in manufacturing has had its adverse impact on employment generation in India. The current mismatch between distribution of workforce and value added in agriculture is one of the main reasons for the large number of poor in our country. This needs urgent correction. Manufacturing has to be the sponge which absorbs people who need to move out of agriculture in pursuit of
higher incomes.

In a highly globalised economy, the need for enhanced export competitiveness needs no introduction. India must aim to match China in manufacturing given the low-cost labour with the added virtue of skills. The share of the manufacturing sector in the gross domestic product in India is 17 per cent compared to 33 percent in China, 29 per cent in Korea, 25 per cent Brazil and 27 per cent in Thailand. However, we are short in other resources and infrastructure that investors seek, a weakness that has checked the flow of investments into skill-intensive manufacturing. Recent trends in some sectors, such as auto and auto components, specialty chemicals, generic drugs and engineering, however, suggest a vast scope for global manufacturers to locate here. The policy thrust outlined by the Prime Minister through the two flagship programmes, ‘Make in India’ and ‘Skill India’ ,should be understood against this background.

And worryingly, it is losing depth. While China’s GDP is 3.8 times larger than India’s, its production of machine tools, the ‘mother industry’ of manufacturing, is 55 times more! India needs a strategy to grow manufacturing
12 per cent to 14 per cent per annum, create 100 million new manufacturing jobs in the next 15 years to realise its ‘demographic dividend’, and create more depth in capital goods industries and innovation for its manufacturing sector to be competitive and sustainable. An innovation strategy must be closely intertwined with an integrated manufacturing strategy. This demands a radical departure from the strategies we are used to.

Manufacturing Competitiveness: Meaning and Coverage

Competitive economies are those that have in place factors, driving the productivity enhancements on which their present and future prosperity is built. A competitiveness-supporting economic environment can help
national economies to weather business cycle downturns and ensure that the mechanisms enabling solid economic performance going into the future are in place.

The World Economic Forum (WEF) defines competitiveness as the set of institutions, policies, and factors that determine the level of productivity of a country. The level of productivity, in turn, sets the sustainable level of
prosperity that can be earned by an economy. In other words, morecompetitive economies tend to be able to produce higher levels of income for their citizens.

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Courtesy : Yojna Magazine