2018-CGS-29: Mains Revision-17: Secondary Sector of Economy

  • Proposal of making the global electronics transactions custom duty free a permanent feature. This will adversely affect the revenue generation.
  • The lack of commitment from developed world on the issues which is vital for developing countries like Doha development agenda, Special safeguard mechanisms. Rather cherry picking of issues which is suiting their needs which is undermining the importance of WTO.
  • With the programmes of government like Digital India and Bharath Broadband, India can leap forward in the e-commerce. The parliament must enact the consumer protection bill 2018 and build the human resource for taking the benefits out of e-commerce. [Mint]

    Make in India- Defence

    Make in India aims to make India a manufacturing hub. It aims to increase the share of manufacturing sector in GDP to 25% and generate 100 million employments.

    A report on the defence procurement process has noted that the Make in India- defence initiative has “failed to demonstrate its true potential” due to procedural delays. Similar is the story with Make in India.

    Why Make in India is not able to achieve its objectives?

    The various reasons for this Include

    • Labour Reforms: labour reforms are still an untouched arena. The stringent and cumbersome laws are acting as barriers in increasing the investments in manufacturing sector which is labor intensive.’
    • Decreasing Investment: India due to macroeconomic reasons is witnessing decreasing investments and reduced gross capital formation. As a result there are not many improvements in Make in India.
    • Technology and Upgradations: India needs an overhaul in its technology and the infrastructure through up gradations. Lack of indigenous technology and weak domestic R and D is reducing the prospects of Make in India.
    • Twin Balance Sheet problem: As a result of increasing NPAs and balance sheet crisis of corporate, Both Banks and corporate sector have become over cautious.

    Problems with Make in India-Defence

    • Over-Specific requirements: The highly specific requirement of the defence ministry which is sole customer for defence equipments is hindering the Industry expansion.
    • Policy Implications: The recent changes in defence offset policy of increasing the threshold to Rs 2000cr for the defence offset parameter is reducing the opportunities for domestic manufacturers.
    • Delays in procurements: Delays in finalizing contracts due to fear of 4C (Court, CBI, CVC and CAG) as there is no mechanism to differentiate between genuine errors and corruption.
    • DRDO: Ineffectiveness on the part of DRDO which is the premier defence research organisation in the country to build a conducive environment for indigenisation of technology.

    Indian security is facing complex and multidimensional dimensions. This requires an overhaul in terms of defence infrastructure. This opportunity must be effectively utilized by India to achieve greater self-reliance in defence production. [Indian Express]

    Zero effect Zero defect and MSME

    The slogan of Zero Defect, Zero Effect (ZED) was first mentioned by PM Narendra Modi in his Independence Day speech in 2014. It was given for producing high quality manufacturing products with a minimal negative impact on environment.

    Objectives of the scheme

    • Zero defect and zero effect (ZED) aims to achieve a twin goal of production of high quality products with clean technology. ZED Scheme aims to rate and handhold all MSMEs to deliver top quality products using clean technology. It will have sector-specific parameters for each industry.
    • Zero defects will provide with high quality products for consumers and zero effect provides with minimal pollution of the environment. Thus scripting a new role for MSMEs according to changing socio-economic scenario

    Significance of ZED for MSME sector

    • Enhancing the global and the domestic competitiveness of the manufacturing sector so has to broaden the customer base.
    • ZED will act as a catalyst to accomplish the goals under Make in India. i.e increasing the contribution of manufacturing sector to 25% of the GDP and creating 100 million employment.
    • ZED will enhance the productivity and efficiency of MSMEs. Thus enhancing their cost competitiveness and will result in increased profits.
    • ZED will also aid in attracting investments as there is increasing awareness across the world for protecting the environment by curbing pollution.
    • MSME sector is the engine of growth for Indian economy. MSME sector drives almost 38% of nation’s GDP and around employs 110 million employees. ZED scheme will give fillip to the sector.
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