The contribution of the manufacturing sector, as a percentage of the GDP, has remained stagnant in recent years. In this context, analyse the achievements of National Manufacturing Policy, 2011 with regards to its intended objectives.

The contribution of the manufacturing sector to GDP is currently at around 16%.

It has remained stagnant for the following reasons:

• Lack of market demand owing to higher inflation in necessary goods.
• Global economic slowdown – affects export demand.
• Lack of skill upgradation among factory workers.
• Regulatory hurdles in setting up of newer industries.
• Lacunae in transport infrastructure.
• Lacunae in essential infrastructure like 24×7 electricity, internet connectivity, water, etc.
• Failure to catch up with technology-driven manufacturing processes.

National Manufacturing Policy, 2011:

• Improve the share of the manufacturing sector in GDP from 16% to 25%.
• Skilling of the workforce.
• Easing setting up of manufacturing units.
• Impetus to the MSME sector.
• Active collaboration with state governments.

Achievements of NMP 2011:

• Make in India programme drawing increased FDI in the manufacturing sector.
• Share of MSME about 40% of total industrial output by value.
• Skilling programmes – PM Kaushal Vikas Yojana.
• Spirit of competitive-federalism, role of states increased, drawing investors.
• Setting up of SEZs (Special Economic Zones), NIMZs, etc.

While the NMP 2011 envisages greater manufacturing output, it should be accompanied by on-ground reforms. India’s progressive increase in ease of doing business ranking shows that we are on the right track.

Topics: GS-II: Government Policies and Interventions for Development in Various Sectors • GS-II: Development Processes and Development Industry in India • GS-III: Indian Economy Issues Relating to Planning