The National Manufacturing Policy (NMP) 2011 aims to increase manufacturing sector’s contribution to 25% of GDP by 2022, growing at 12-14% in the medium term and creating 100 million new jobs by 2022. To provide a fillip to the implementation of NMP, the PM launched the ‘Make in India’ campaign. This initiative will facilitate investments and transform India into a global manufacturing hub. India would grow by 8.1-8.5% in 2015-16 on the back of reforms, declining oil prices, monetary easing and a good monsoon. Need of improvement in the quality of employment in rural areas to manufacturing and supply of trained workforce for industries will help India reap its demographic dividend.1999-2000 and 2004-05, the number of jobs increased by 59.9 million against the increase in labour force by 62 million people. Data from the 68th NSSO round (2011-12) indicates a revival in employment growth in manufacturing from 11% in 2009-10 to 12.6% in 2011-12.
After a period of slow progress during 2004-05 to 2009-10, employment generation picked up between 2009-10 and 2011-12, when 13.9 million jobs were created, but even this did not keep pace with the increase in the labour force (14.9 million). Promoting growth of micro, small and medium enterprises is critical from the perspective of job creation. The share of the primary sector (agriculture, forestry, fishing, and mining) in total employment has decreased to the halfway mark. While employment in the secondary (manufacturing) and tertiary (services) sectors has shown a considerable increase. Make in India’ can similarly transform manufacturing to creating new jobs, aided by robust domestic demand, abundance of resources, availability of low-skilled and semi-skilled labour force, strong entrepreneurial culture and a sound legal system modelled on the English Law
The major challenges observed are:
To address the regulatory and procedural hurdles that impede business
Special courts can be set up to fast-track adjudication of industrial disputes
A nationwide roll-out of GST is essential to harmonise indirect taxes which, coupled with reduction in MAT, will lead to lower tax burden for the industry.
Flexible labour regulations encourage expansion of formal employment without reducing labour market vibrancy.
The 44 central labour laws along with 160-odd state labour laws have to be rationalised into four broad categories: industrial relations, wages, employment standards and social security
Flexible labour laws can strike a balance between workforce welfare and industry interests to boost income and employment
IT and electronic hardware needs incentives such as favourable duty structure, tax sops and dedicated manufacturing clusters to kick-start investments
Private sector participation in the value chain has to be increased to achieve higher levels of indigenisation in strategic segments