Skip to main content

Manufacturing sector India

Why manufacturing is important than services sector in India’s economic development?

Why manufacturing is important than services sector in India’s economic development?
In 1990, India’s GDP per capita was higher than that of China’s; though China was on its course of faster growth phase supported by the reforms it launched in 1978. Since then, China has outgrown India big and as on 2015, China’s economic size is close to $ 11 trillion whereas India’s size is $ 2.1 trillion. The rise of China was fueled by manufacturing revolution.
Over the last few decades, India’s growth performance was driven by services sector, whereas the growth rate of the manufacturing sector remained lower than that of overall GDP growth rate. As a result, the share of manufacturing in GDP stagnated at around 16%. This has caused perpetuation of structural retrogression with nearly 50% of the population remaining in the agricultural sector by producing only 17% of GDP. Service sector oriented development trend has failed to produce employment opportunities to support the structural shift. The dominance of the service sector and retardation of manufacturing sector has raised serious questions about the country’s development strategy as well.
The damaging elements of the overall development strategy were later corrected by the policy makers. There was a realization that an unconventional development path centered on service sector revolution has serious limitations on employment front as well as on technological attainments. Several policies were launched in quick time to correct the defects in the existing strategy and the beginning was the National Manufacturing Policy.
Macroeconomic importance of manufacturing is that large volume of employment is to be created outside agricultural sector to provide sustainable living opportunities to the expanding population. It is estimated that India needs to create 10 million new jobs each year outside agriculture to stay at its current unemployment level of 7 percent.
Steel, automotive sector, light engineering, pharmaceuticals, food processing, electronics, machine tools, textiles etc., are the major manufacturing sectors where India has developed considerable competence.
Significant progress was made in spheres of science and technology over the years. There is strong network of S&T institutions, trained manpower and an innovative knowledge base. Skill addition measures are spreading and efforts by the government to integrate the industrial training system with the manufacturing sector is going on.
From the angle of development strategy, India’s late policy resurgence on manufacturing is the main reason why the country lags behind China. The sector’s unique role in triggering structural change has remained unattended while focusing on less employment providing, less tradeable and less technology oriented service sector. For a country of more than one billion people, manufacturing is the solution for finding employment and income. In this context, development of manufacturing sector is a way to deliver inclusive growth as it helps people in the rural areas to seek employment in the manufacturing sector.

Comments

Post a Comment

Popular posts from this blog

Work certified and uncertified

Meaning of Work Certified  When contractor takes the contract to complete any construction work, it may complete in 4 or 5 years. but contractor has to pay different expenses for material, labor and others. So, it is very necessary to pay him some money of contract. This money is given on the basis of work done. So, any part of construction which is completed by contractor will be work certified if it is certified by an authority. Authority may be independent engineer or architect who can estimated the work. He will issue the certificate of work done after certifying the work of construction. On this work certified, contractor has right to get money of contract. Meaning of Work Uncertified Work uncertified means work done but not certified by authority. So, contractee will cut some money on the basis of work uncertified and will keep in his pocket. This will be retention money. Accounting Treatment of Work Certified and Work Uncertified  (I) Work  certified...
Read more

factors influencing choice of advertising agency

The Advertiser looks for an advertising agency whose services and expertise meets his requirements. Following factors should be considered while selecting an advertising agency:- Services offered by Ad-agency  - There are different agencies provides different services, some provides all the services, some provide selected services, some provides only media services. It depends on the requirement of advertiser whether he need a fulls service agency, creative boutique, media buying service agency, or a  sweet shop . Experience of Agency  - An experienced agency performs better then a new agency  because it is familiar with different components of marketing environment like- competitors' policies, taste of consumer, income of consumer, consumer responses, fashions and trends, reputation of different media etc. Location  - A major factor to be considered while selecting ad-agency is location of office of agency. A considerable amou...
Read more

Environment of International Marketing

Image
Apple is so successful because of their effective marketing efforts. They are good in identifying relevant environmental factors and trends which helps in taking advantage of opportunities and minimising threats.  New technological developments, global economic conditions, worldwide population changes, increased competition, legislative requirements, and political events are some of the factors affecting current and future marketing activities of the organisations around the world. Combination of such factors makes the International Marketing Environment. The long term performance of any organisation depends on its ability to identify and respond effectively to the key changes in its marketing environment.  Meaning of International Marketing Environment  International Marketing Environment is the combination of various factors external to an organisation that can affect the international marketing decisions of the organisation in international market. These fac...
Read more