The recently announced Union Budget was a crucial one. It was the first time in decades where a budget was announced in the backdrop of an economy that has contracted without precedent. The Reserve Bank of India (RBI) further anticipates that India's GDP should shrink by around 8 percent, per International Monetary Fund (IMF) gauges. It is imperative to now focus on bringing the economy back on track.
With borders shutting down for close to a year, the supply chain was massively impacted. And while this posed several challenges, it also opened a tremendous opportunity – to create a self-reliant nation that can cater to domestic needs as well as export to make the economy bounce back. Historically though, India has always seen success in assembling products, rather than manufacturing something completely from scratch. A shift in this mindset is a long term journey, but will positively yield results over the years.
I see the tremendous opportunity that is there in manufacturing within the country for domestic and international consumption. And while the government has announced a slew of measures to spur job creation in the manufacturing sector, it is imperative more than ever before that we make the ‘Make in India’ story work, to enable the ‘Make for the World.’
From a manufacturing perspective, our government is going in the right direction, however a little extra push can accelerate economic growth.
• The Covid-19 crisis created a massive demand supply gap, and the only way to ensure that this is not a business challenge in future is to become self-reliant. Consumer electronics, healthcare, and durables are industries where there is a significant opportunity in the domestic consumption narrative as well. The declaration in the budget to bring 13 areas with an expense of Rs 1.97 lakh crore on various schemes over five years will boost makers to extend creation and produce extra venture and open positions. This rollout is intended at attracting international investments in the manufacturing sector and make India globally competitive. It aims to encourage local companies to set up or expand existing manufacturing units in the country.
While the government has announced a slew of measures to spur job creation in the manufacturing sector, it is imperative more than ever before that we make the ‘Make in India’ story work, to enable the ‘Make for the World
• The PLI scheme has the potential of creating approximately 1.40 crore man-months of additional work. This enables doubling the workforce engaged in production and manufacturing activities, thereby creating more jobs and income. Our policies and regulations should invite foreign companies to set up manufacturing units in the country while also encourage the local companies to expand production and manufacturing facilities.
• Making it easier to set up businesses, irrespective of the scale and size is definitely a great move to increase economic activity. We need to create a competitive manufacturing ecosystem, capable of reducing dependency on other countries. And for this, we need to reduce bottlenecks and encourage investments in better technological innovations.
• Availability of flexible financing and skilled workers to improve efficiency and reduce costs is the key to realize real growth in the sector.
The manufacturing sector contributes to approximately 20 per cent of India’s GDP. And therefore, it largely shoulders the responsibility of job creation, attracting investments, propelling business, industrial and economic growth. Creating a conducive environment for this industry to thrive is essential. Building up the scale of its manufacturing sector is of utmost importance for the country as the lack of it would prove detrimental to its economic aspirations.