2024-10-20
In post-liberal era, we lacked infrastructure. liberal era, investor (FDI and domestic), they see India lack infra requires for setup manufacturing unit. They did not see scope in manufacturing. Business are open, but easy of doing not had that time. It hard, bureaucratic inflexibility, lacks of infra. Open but not had services requires to setup and operate industrial units. System changed but machinery same, "new bottle with old win".
"When, agriculture output surpass the necessity, then trade start. It also start trade of secondary items, transfers happened with primary output agriculture. This how urbanization happened. At some times secondary sector requires advices and services, then service sector appear." -> Path of development, from agarin society to service based economy.
In 1991, we had primary economy, it should be manufacturing based. But as we did not had easy of doing business. FDI directed to service sector. Organizations that provide services comes to India, in fields of food chains, telecom, male chains etc.
Because service sector can work without infra. The cycle of development not happened in India. India jump from agricultural sector to service sector.
Agriculture -> many jobs. when it decreased, labor moves to industry. it do not require high level of skills. for that it can absorb large labor moveout from agriculture.
But, service sector -> requires high level of skills, a certain level of higher education, for that it can't able to absorb labor moveout from agriculture.
As Agri labor not able to move to service sector. inequality between people increased. People who able to get higher education worked in service sector, wages raise, whereas Agri labor wages decreased.
Services sector contribution of Indian GDP -> 53%, employment -> 32%
Agri -> GDP -> 18% -> employment 42%
Manufacturing -> 28% -> employment -> 25%
GDP is divided among them, services sector peoples get most as their share is larger. Whereas Agri sector peoples get less, more people and less share. This is inequality.
Indian growth after 1990s reform is jobless, because, growth comes from the service sector, which not employ large amount of workers and Agri labors not able to join service sector. Our shortcut to growth was dangerous. Industrial growth did not happened.
But, this service sector depends on global market, we provide services to advance economics. 2008 financial crisis, it hit hard India. India realized that we need manufacturing. 2011, new policy "National Manufacturing Policy (NMP)" come up by central government.
Objectives of NMP:
Increase share of manufacturing in GDP.
Identify issues -> lack of infra, lack of skill manpower
Aim:
Manufacturing share increased to 25% of GDP
100 million additional jobs by 2022, in manufacturing
Increased the level of domestic value addition and technological depth in manufacturing
Enhance global competitiveness and make India a global hub of manufacturing
Ensure skill development/skill upgradation
Ensure sustainable development
In 2014, Modi government, named this policy, "Make in India".
NIMZs: National Investment and Manufacturing Zone
(Tax deduction for enterprise do manufacturing activities)
Two Areas -> Processing Area (SEZ's, industrial parks) and Non-processing area (residential area, commercial area)
Conceptualized as integrated industrial townships with state-of-the-art infra, land use on the basis of zoning, and energy efficient technology and requisite infrastructure managed by an SPV. 30% area must be industrial township.
NIMZ's are setup parallel to economic corridor. Reason of industrial policy failure in 1990s is lack of infrastructure. NIMZ's setup near economic corridor, it facilitate better infra.
Since years policy-makers have been debating how to give an impetus to manufacturing in India and make India a Global Manufacturing Hub.
Launched the "Make in India" campaign to
It helps to start the cycle of prosperity
Demographic dividend, democracy, and demand. India has these, Government think, by these we can attract investment.
Investment -> will start the cycle of prosperity. because we has Demographic dividend, democracy, and demand.
The "Make in India" initiative is based on four pillars, which have been identified to give boost to entrepreneurship in India, not only in manufacturing but also other sectors.
"All this have happened in on paper"
New Process -> Ease of doing business. procedures has to go through for operation business. Such as NOC, de-license. State will facilitate business. Business comes, state will welcome them in red carpet. Business do not have to deal with the red tap.
New Infrastructure -> Build modern and facilitating infrastructure. Infra lead development. Establish infrastructure that support industries. Next generation that are modern and supportive for business infra, I-ways, Water grid, fiber optical, gas grid, electric grid. Public private partnership. Prot lead development, Sagar Mala, Bharat Mala.
New Sector -> Focus on sector, which are not explore well. Total 25 sectors are identified.
New Mindset -> Center and state corporation. Previously, Center plan and state implemented. It creates confusion for business, where to go. Corporation helps exports, Central government's mechanism will helps state government to facilitate exports, industries are in state and going to setup in the states. It named "NITI" Aayog