Sarat Chandra IAS Academy

UPSC Civils Daily Mains Question 12th August-2020


Q) “Time for action to make India a global manufacturing hub.” Analyse


Prime Minister gave a mantra ‘vocal for local’ during his address to the nation. The idea was to promote local brands and goods.

Opportunities for India:

  • There is hope for a quick recovery in India, we have to make concerted efforts to realise this including an integrated multi-pronged approach through public policy support, private sector participation and individuals support.
  • As many Companies plan to shift out of China that presents a huge opportunity for India. We need to prepare the groundwork to welcome such investment into India.

Government Initiatives for promotion of manufacturing sector:

  • Make in India initiative with the primary goal of making India a global manufacturing hub.
  • ‘Zero defect zero effect’ for MSMEs to deliver top quality products using clean technology.
  • ‘SKILL INDIA’ – a multi-skill development programme with a mission for job creation and entrepreneurship.
  • Labour reforms through a dedicated Shram Suvidha Portal, Random Inspection Scheme, Universal Account Number and Apprentice Protsahan Yojana.
  • Defence Procurement Policy (DPP) under which the priority will be given to the indigenously made defence products.
  • Technology Acquisition and Development Fund (TADF) under the National Manufacturing Policy (NMP) to facilitate acquisition of Clean, Green and Energy Efficient Technologies by MSMEs.
  • Pradhan Mantri MUDRA Yojana (PMMY) for providing loans to small-scale businesses.
  • Aatmanirbhar Bharat Abhiyan

Challenges in manufacturing sector:

  • India’s manufacturing activity contracted as lockdown led to a slump in demand and massive supply chain disruptions.
  • The numerous regulatory blocks, unfavourable land and labour laws, inadequate transport, communication and energy infrastructure, among others.
  • India faces stiff competition from South-East Asian and other South Asian countries.
  • Global technological and environmental changes.

Way Forward:

India could be their destination of choice if it offers a conducive environment for investors. The following measures may overcome the above challenges

  • The conducive business climate with better infrastructure and logistics, simplified land and labour laws and single window clearances can enable India to develop a robust manufacturing ecosystem.
  • This will help attract foreign capital, latest technology, create jobs and boost our exports.
  • We must also focus on Skill and Scale to be both quality and cost competitive and serve a global customer base.
  • Huge scope exists in sectors such as pharma, electronics, automobiles and defence machinery, not only to be self-reliant but also capture a decent slice of the global supply chain.
  • Investor’s confidence must be improved.
  • Improving physical infrastructure from transport systems to the power sector is essential.
  • Importance should be given to electronic sector.
  • Improve access to finance for smaller enterprises.
  • Making firm entry and exit easier.
  • Inverted duty structure.
  • Enhancing the flexibility of labour regulations.
  • Low-cost manufacturing is important for India.
  • If India wants to raise its GDP share in manufacturing around 25%, industry will have to significantly step up its R&D expenditure. This must be addressed by the new industrial policy.


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