Faster economic growth requires increased share of the manufacturing sector in GDP, particularly of MSMEs. Comment on the present policies of the Government in this regard. (150 words) (UPSC GS 3 2023/10 marks)

Introduction:

India aims to achieve faster economic growth by boosting the share of the manufacturing sector in its GDP, with a special focus on Micro, Small, and Medium Enterprises (MSMEs). Several government policies have been introduced to support this goal.

Government Policies for Promoting Manufacturing Sector, Especially MSMEs

1. Make in India Initiative:

   - Launched in 2014 to promote manufacturing in India and attract foreign investment.

   - Encourages setting up manufacturing units across sectors like electronics, defense, automobiles, and more.

   - Example: Recent ban on Laptop imports to promote laptop manufacturing in India.

2. National Manufacturing Policy (NMP):

   - Aims to increase the share of manufacturing in GDP to 25% by 2024.

   - Focuses on skill development, infrastructure improvement, and technology upgradation.

   - Example: National Investment and Manufacturing Zones (NIMZs) are being established to boost manufacturing clusters.

3. MSME Schemes and Support:

   - Various schemes and subsidies are provided to MSMEs to enhance their competitiveness.

   - Examples: Prime Minister's Employment Generation Programme (PMEGP) and Credit GuaranteeFund Trust for Micro and Small Enterprises (CGTMSE).

4. Atmanirbhar Bharat Abhiyan:

   - Introduced in response to the COVID-19 pandemic, this initiative promotes self-reliance in manufacturing.

   - Aims to reduce reliance on imports and boost domestic production.

   - Example: Production-linked Incentive (PLI) scheme for various sectors such as electronics and pharmaceuticals.

5. Ease of Doing Business:

   - Streamlining regulatory processes and reducing bureaucratic hurdles to make it easier for businesses, including MSMEs, to operate.

   - Example: Implementation of online clearance systems and single-window mechanisms in states like Gujarat and Maharashtra.

6. Skill Development and Workforce Training:

   - Emphasis on enhancing the skills of the workforce to meet the demands of the manufacturing sector.

   - Example: Skill India program, which offers training and certification to individuals in various industrial skills.

7. Infrastructure Development:

   - Investment in infrastructure projects like industrial corridors, logistics parks, and connectivity to facilitate manufacturing growth.

   - Example: Development of the Delhi-Mumbai Industrial Corridor (DMIC) to promote manufacturing in the region.

8. Export Promotion:

   - Encouraging MSMEs to participate in international trade by providing export incentives and easing export-related processes.

   - Example: Export Promotion Capital Goods (EPCG) scheme for duty-free import of capital goods for export production.

Conclusion:

The Government has implemented various policies and initiatives to promote the manufacturing sector's growth, especially focusing on MSMEs. These efforts aim to enhance economic growth, job creation, and self-reliance in critical sectors, contributing to India's long-term economic development.