India’s manufacturing segment has the potential to touch $ 1 trillion by 2025 and account for 25-30 per cent of the country’s GDP to create up to 90 million domestic jobs by 2025. For that to happen, however, introduction and implementation of far-sighted policies is imperative, along with a holistic understanding of the scope of India’s manufacturing sector
By Dr. D.K. Batra
Amidst the noise surrounding ‘Make in India’, ‘Skill India’ and other such initiatives rolled out by the NDA government, one thing is for certain: Indian policy makers have decided to tackle the issue of a weak manufacturing sector on a war footing. From 2010-11 onwards, a decline in GDP growth in the manufacturing sector was witnessed and in order to make the sector globally competitive, the government had announced the National Manufacturing Policy in 2011.
The policy looked at enhancing the share of manufacturing sector to India’s GDP from 16 to 25 per cent and to create 100 million jobs by 2022. The effects, however, have been few and far between. The growth of the manufacturing sector, or the lack of it, continues to be a cause of concern. While uncertain economic environment, inadequate infrastructure, competition from imports, delayed clearances, unfavourable market conditions and cost escalation are some of the major constraints, but finding skilled labour has emerged as the biggest challenge confronting the growth of the sector.
Government estimates suggest that India’s manufacturing segment has the potential to touch $ 1 trillion by 2025 and account for 25-30 per cent of the country’s GDP to create up to 90 million domestic jobs by 2025. For that to happen, however, introduction and implementation of far-sighted policies is imperative, along with a holistic understanding of the scope of India’s manufacturing sector.
Scope of manufacturing and its role in Indian economic growth
The manufacturing sector of India has the potential to seize more of the global market. The ‘Make in India’ initiative announced officially in September 2014 by Prime Minister Narendra Modi aims to promote investment, protect intellectual property, encourage innovation, enhance skill development, and build superior manufacturing infrastructure to transform India into a manufacturing hub of the world. With India already being ranked sixth among the world’s 10 largest manufacturing countries, yet not even close to pulling its weight when it comes to this sector, one can imagine the true manufacturing potential of our country.
Government programmes to boost manufacturing sector in India
Government initiatives such as the Make in India, Skill India and Digital India were launched to evolve the manufacturing sector of our country. As per the National Skill Development Corporation (NSDC), a public-private partnership set up by the Planning Commission with a mandate of providing funding and direction to private skill development programmes, the rising skill gap in India is estimated to be more than 250 million workers across various sectors by 2022. The government had set a target of skilling 8.5 million people in 2012-13, but only 1.4 million were trained by various ministries and NSDC by mid-November 2013.
With nearly 63 per cent of the population in the working age group between 15 and 64 years, Prime Minister invited the world to ‘Make in India’, and suggested that growth of manufacturing sector is necessary for employment generation of the youth.
There is an urgent need for skilling, re-skilling and up-skilling the working population through initiatives such as ‘Skill India’. Make in India and Skill India are essentially the two pillars of Indian manufacturing. While the Make in India initiative boosts manufacturing activity and thereby create jobs, Skill India would ensure a steady supply of a skilled workforce to the industry for enhanced productivity and assuring overall economic growth.
These days, an alarming trend is being noticed in India. Predominantly an agricultural land, successive generations’ are losing interest towards blue collared jobs. This is most evident in the agricultural and manufacturing sector, both of which enjoy negligible popularity amongst today’s youth. A social and financial glorification of jobs involving manual labour will contribute towards their future viability.
Suggestive initiatives to bridge the skill gap for manufacturing sector in India
Although India’s demographic dividend is appreciated as one of its strengths, it can and has been a menace when not managed appropriately. A massive unskilled workforce is much worse than a shortage of manpower. Diversely skillful labour, ample job opportunities and non-stigmatizing manual labour, this is the need of the hour.
Vocational education should not be considered the last resort for building a career. For the growth rate that India is aspiring for, it is strongly advisable to incorporate vocational training in the state curriculum at all school and college levels. The government and the corporate alike should introduce programmes to explain the merits of vocational streams and the career opportunities arising out of them. Also, the media should be able, and willing to, disseminate accurate and timely information to aspirants and help them make an informed career choice.
Not only the government but also private companies should come forward to constructively participate in skill development. A way forward is to make training appealing to youth and every industry should play an important role in setting standards for jobs, supporting ITIs and provision of desired impetus- both qualitative and quantitative- are given in the country. With constant efforts by the government and industry towards skill, and infrastructure building initiatives, India can emerge as the true world leader in the era of digitized manufacturing.
The author is professor marketing at International Management Institute, New Delhi
