A Discussion on India’s Manufacturing Sector: Weaknesses and the Way Forward

Abstract

Despite the significant role of the tertiary sector to national growth and employment generation, there is no denying to the importance of the manufacturing sector which has the potential to bring stable and sustainable growth for Indian economy in the long run. However, the industry has not grown at the desired speed and has not generated enough employment opportunities. In light of the critical nature of the manufacturing sector as a contributor to economic growth and development, governmental interventions such as policy level changes and provisioning of incentives and relaxations on starting, sustaining and expanding operations in this sector, have been made. However, the gains have not been commensurate to the push being provided. Thus, it becomes important to explore and understand that the right impetus on the right points. This paper attempts to meet three objectives - to examine the current state of Indian manufacturing sector, to identify the major reasons for the ailing manufacturing sector and to suggest measures in the form of policy prescriptions or reforms which can make a credible and positive difference to the state of manufacturing in India. The three objectives are sequentially discussed and achieved by use of secondary data sources that include existing accessible research studies, governmental and institutional databases and relevant books.