National Manufacturing Policy Research Articles

Inter-industry Linkages of ICT Sector in India

The information and communications technology (ICT) sector has a strategic importance in India, given it is export-intensive in nature and has network externalities characteristics. Thus, it is critical to understand whether such externalities or spillover of ICT affects other industries of the economy in order to make informed policy decisions. This paper attempts to understand inter-industry linkage of the ICT sector. Input–output transaction table (IOTT) has been used to analyse the backward and forward linkages of the ICT sector. The findings reveal that the demand of ICT services as an input and supplier has huge potential to increase the total output and employment. There is vast scope to increase the integration of ICT with other sectors. Scope for policy and planning in India is still large, considering ICT’s strong backward and forward linkages with other sectors of the economy. Although ICT usage in other sectors of the economy has increased, it is still much lower compared to other developing and developed countries. In particular, improving domestic productivity and linking it with the national manufacturing policy and the recent “Make in India” initiatives and other polices of the government can improve the production of ICT goods and usages of ICT by other sectors of the economy.

Digital transformation priorities of India’s discrete manufacturing SMEs – a conceptual study in perspective of Industry 4.0

PurposeManufacturing excellence is critical to our nation’s economy. Indian Government’s National Manufacturing Policy, drafted in 2011, is being revamped to include the aspects of Industry 4.0. Initiatives, both led and assisted by government and industries, are being launched to catalyze and transform India’s manufacturing competencies. This paper aims to study the functional areas which can potentially leverage Industry 4.0 technologies and help India’s manufacturing establishments to transform. It does so in context of the aspirations of India’s small and medium discrete manufacturing establishments (SMME) towards adopting digital technologies for the identified functional areas. The study draws its context from the relevant literature review intended to examine the academic articles published until the end of September 2018, followed by a maturity assessment survey of Indian SMMEs to establish priority areasDesign/methodology/approachThe literature survey has been complemented with a maturity survey of more than 250 of Indian SMMEs to establish adoption gaps by comparing proficiency and sophistication of their present status and proposed adoption aspirations by 2020. The assessment of the organizational aspirations and gap areas identified is expected to indicate which of the Industry 4.0 elements can be adopted by them.FindingsThe maturity survey undertaken throws up several insights – Indian SMME community’s self-assessment indicates operational measurements followed by manufacturing and design interventions as the aspired transformation cycle. The survey indicates that manufacturers would like to make changes to their design and manufacturing strategies based on performance metrics; therefore, they need to first capture real-time machine data, analyze and then incorporate the resulting improvements in manufacturing and design decisions in that order.Research limitations/implicationsThe maturity assessment method itself is in evolution stage, and future correlations with benefits will strengthen observations. Industry 4.0 being relatively new initiative for India, availability of country-specific academic literature is limited. The maturity assessment survey undertaken across organizations of North, West and South India therefore carries the risk of not reflecting the views of a wider population. The current maturity, or the lack of it, of proficiency and readiness of India’s SMMEs with respect to digital technologies may also be a barrier to self-examine.Practical implicationsThis research is expected to provide insight into priorities to be adopted for digital-centric transformation by Indian SMMEs. It is expected to facilitate policymakers and influencers from government and industry to help frame policies that facilitate the adoption of digital technologies by Indian SMMEs and facilitate India’s technical education community to adopt skill development programs to support industry. It is expected to provide guidance to India’s academic institutions to rejig their curriculums to help bridge the critical skills gap that exists between newly inducted engineering professionals and industry.Social implicationsDigitalization is expected to foster lean and therefore support sustainability initiatives. Digitalization is expected to help create new, alternative sources of employment which are more relevant to emerging times and foster unlearning the past and relearning of new skills. This emerging diversity of engineering applications resulting from digitalization is expected to also support the larger and poorer agricultural community of India and help the sector to become more efficient and productive, which in turn will reduce economic alienation of a large section of Indian society.Originality/valueIndustry 4.0 has been identified as the transformational initiative for India’s manufacturing competitiveness. Indian manufacturing sector needs to urgently implement the digital technologies and improve their performance and remain relevant in this dynamic market. This research will help guide them to frame their respective digital strategies and be successful. This research will help government and industry influencers to plan and execute their interventions.

Casting a New Manufacturing Gameplan Thru ‘Make in India’

To support the making of a powerful India, an initiative titled “Make in India” was instituted in 2014 duly complimented by National Manufacturing policy. This paper reviews the various imperatives and challenges, along with the success levels in light of Make in India, and measures in terms of the relationship of Manufacturing (growth) to GDP.The various manufacturing options are classified, and a case is raised for preferences of founding as a dominant manufacturing process, in view of the capability for complex products, through its attributes or thru’flexibility. The challenges and constraints, if any, are also discussed. Thus, Grounded over the exquisite competence of founding, the paradigm of ‘Cast in India’ is proposed.For a competitive benchmarking the case of China is considered. How to cite this article:Thareja P. Casting a New Manufacturing Gameplan Thru ‘Make in India’. J Adv Res Mech Engg Tech 2019; 6(1&2): 4-12.

Determinants of SME Credit in Mumbai-Empirical Analysis On Factors

The small and medium enterprises are the pillars of economic development in India. With over 30 million units of SME units in India, they are contributing to 45% in country's GDP. The importance of SMEs in manufacturing is mainly due to the volume of units that exist in this category. Recently government has taken several steps in boosting the manufacturing in India, "Make in India" is one such initiative and National Manufacturing policy has been announced to revamp the sector. One of the major hindrances in expansion is lack of timely and sufficient funds. Today the total gap of SME funding is estimated to be approximately $126 billion. Out of which the debt gap is approximately $84 billion (Ravij Janjanan, 2014). Research is undertaken to know the determinants of credit in Mumbai city which is the financial capital of India. Present paper studied the determining factors of credit in SME sector in Mumbai by applying Binary logit regression model. Data was collected from supply side through administered questionnaire. Factors were identified through focus group interviews and later tested for validity and reliability.Net worth and Age of the owner found to be most impacting factors loan officers are considering while granting credit to SMEs in Mumbai. Study also found that age of the owner is very important determinant along with net worth and financial feasibility. Odds ratio for age of the owner (0.70) of respondents indicate that whose loans are approved belongs to lower age groups than the respondents whose loans are disapproved. Odds ratio for Net worth (1.36) of respondents indicate that one-unit change in the Net worth is going to increase the loan acceptance by 1.36 times. Managerial implications of this study would be Banks can focus on more startup loans and can tap young entrepreneurs who have creative and prospective ideas on business. SME owners should focus more on innovation, clarity of thought expressed in project proposal and approach for loan sanctions at young age to improve the credit flow.

Impact of Technological Change on Employment: Evidence from the Organised Manufacturing Industry in India

This paper makes an attempt to understand the impact of technological change on employment in the organised manufacturing industry in India during the period 1981–1982 and 2014–2015. It classifies the manufacturing industry in India into capital-intensive industry and labour-intensive industry, and applies the Log Mean Divisia Index—a complete decomposition model—to examine the effect of pre-defined factors such as (1) activity effect (scale effect), (2) structural effect, and (3) intensity effect (technological effect) on employment change in the manufacturing industry in India. The study dissects the specified timeframe from 1981–1982 to 2014–2015 into the pre-reform period (1981–1982 to 1990–1991), the first decade of economic reform (1991–1992 to 2000–2001), and the second decade of reform (2001–2002 to 2014–2015). Although the estimated effect of each factor on employment change varies across different periods, it is found that the increasing manufacturing activity raised the employment in the industry. The positive contribution of activity effect on employment generation in the industry, however, has been reduced by negative labour intensity effect or technological progress. Although the structural effect on employment is observed to be different in diverse timeframes, its impact on employment change in the industry is negligible. The findings of the study may be useful for evidence-based policymaking to meet the National Manufacturing Policy (2011) target to raise the share of manufacturing from 15% to about 25% of the national GDP, and at the same time creating an additional 100 million jobs by 2022.

A Study on Financial Performance Evaluation of Small Scale Industries: Impact and Issues

Small scale industries either are known as SSI or generally as the Small and Medium enterprises refer to those small entrepreneurs who are engaged in production, manufacturing or service at a micro scale. Small scale industries play a focal role in the economic and social development of India in the post-independence era. Small scale industries constitute the backbone of a developing economy with its effective, efficient, flexible and innovative entrepreneurial spirit. Round the world SSI units have been accepted originator of economic growth and for promoting equitable development. The contribution of SSIs to the Indian economy in terms of employment generation, reducing regional imbalances, promoting inter-sectorial linkages, magnifying exports and fostering equitable economic growth potential has been quite marvellous. This sector through more than 6000 products ranging from traditional to high-tech, consisting over 36 million units widely dispersed across the country provides employment to over 80 million persons, contributes about 8% to country's GDP besides accounting for 45% of manufactured output and 40% to the export from the country. The SSI sector has the perspective to spread industrial growth around the country and can be a considerable associate in the progress of comprehensive growth. The target of proposed National Manufacturing Policy of enhancing the share of manufacturing sector in GDP to 25% and to create 100 million jobs by end of 2022, as well as to take India from its present 2 trillion dollar economy to 20 trillion dollar economy can be achieved with the help of SSI units. [1] Most of the SSI units don't care about their financial position, they only run business, mostly focus on cash receipt and what their bank account position is. Accounting and financial evaluation have always been seen as the best route to a successful business career as it is considered as the language and basic tool of a business organization which helps to determine how a business is doing. The growth of the small-scale enterprises can be determined through maintenance of proper records of accounts, which provides the basis for safeguarding and controlling the business properties. We found that there are many perceived factors affecting their adoption of accounting practices and their effects on their business operations in the area. Among such factors include; lack of adequate training, wilful misconduct, and negligence. This article presents an empirical investigation of financial performance evaluation practised by SSIs and its impact.

(Analysis of the Manufacturing Sector in India and Its Implications for KoreaaIndia Cooperation)

Korean Abstract: 본 연구는 인도 제조업의 세부 업종별 구조와 특성을 연구했다. 특히 본 보고서는 기업 수준의 자료를 이용하여 인도 제조업을 24개 소분류 및 137개 세부 분류로 구분하여 분석을 수행했다. 먼저 본고는 세부 업종별 분석 전 인도 제조업의 현황, 제도, 정책을 조사했다. 특히 주요 신흥국과 인도와의 비교를 통해글로벌 경제에서 현재 인도 제조업의 상황을 파악하는 데 주력했으며, 제조업 관련 정책을 세부산업별, 지역별로 파악했다. 또한 선행연구를 면밀히 검토하여 인도 제조업의 실태를 조사했다. 세부 업종별 분석에서는 시장지배력, 성과, 연구개발, 글로벌화, 생산성으로 구분하고 산업집중도, 허핀달-허쉬만지수, 러너지수, 매출액, 총자산, 영업이익률, 연구개발비, 수출, 수입, 노동생산성을 산출했다. 다음으로 인도 제조업의 총요소 생산성을 확률적 프런티어 모형을 이용한 회귀분석을 통해 추정하고 이에 대한 결정요인을 세부 업종과 기업특성별로 비교분석했다. 또한 인도 제조기업을 인도 국내기업, 해외기업(한국기업 제 외), 한국기업으로 나누어 이들의 특성을 비교분석했으며, 본 연구의 결과를 바탕으로 한·인도 제조업 유망업종을 선정했으며, 우리기업의 인도 제조업 진출관련 우리정부에 대한 정책적 시사점을 제시했다. English Abstract: Make in the well-known national manufacturing policy of India, has raised attention around the world as it presents its vision of developing India into a global manufacturing hub. First and foremost, it will be significant for Korea to establish additional strategies toward the Indian market in order to diversify its exports. Furthermore, India is growing in its importance for Korea when considering its increasing need to re-adjust from dependence on the G2 economies, amidst rapidly changing circumstances surrounding the Korean Peninsula. Therefore, this research explores the structure and characteristics of each sector of the Indian manufacturing industry. In particular, this study analyzes the manufacturing industry in India, categorized into 24 sections and 137 divisions, by using firm-level data. First, prior to the analysis, this research investigated the current status, system, and policy of the overall manufacturing industry in India. Particularly, we focused on pinpointing the status of India’s manufacturing industry within the global economy through comparison with other major emerging economies. Our study also examines related policies at the sectoral- and state-level. In addition, this research conducted a thorough review of the literature available on the Indian manufacturing industry. For the sectoral analysis, this research examined the areas of market power, performance, research & development (R&D), globalization, and productivity and estimated industrial concentration, HHI (Herfindahl-Hirschman Index), Lerner index, sales, total assets, operating margin, R&D expenses, exports, imports, and labor productivity. Next, our research performed a regression analysis using a probabilistic frontier model to estimate the total factor productivity (TFP) of Indian manufacturing industries, with the determinants analyzed through comparative analysis of industrial sectors and firm characteristics. Moreover, this research conducted a comparative analysis on the characteristics of Indian domestic companies, foreign companies (excluding Korean companies), and Korean companies in the Indian manufacturing sector. Based on the research results, our study first and foremost strove to provide qualified guidelines for Korean companies to select potential industries for entry into the Indian market. Finally, this paper aims to provide valuable insights in different manufacturing sectors to determine whether the Indian economy is better suited as a production center, or as an export market.

Unleashing The Growth Potential Of Indian MSME Sector

The MSME sector occupies a position of strategic significance in the Indian economic structure. This sector contributes nearly eight per cent to country’s GDP, employing over 80 million people in nearly 36 million widely-dispersed enterprises across the country; accounting for 45 per cent of manufactured output, 40 per cent of the country’s total export, and producing more than 8000 valueadded products ranging from traditional to high-tech. Furthermore, these enterprises are the nurseries for innovation and entrepreneurship, which will be key to the future growth of India. It is also an acknowledged fact that this sector can help realise the target of the proposed National Manufacturing Policy to enhance the share of manufacturing in GDP to 25 per cent and to create 100 million jobs by the end of 2022, as well as to foster growth and take India from its present two trillion dollar economy to a 20 trillion dollar economy. Despite the sector’s high enthusiasm and inherent capabilities to grow, its growth story still faces a number of challenges. In this light, the present paper examines the role of Indian MSMEs in India’s economic growth and explores various problems faced by the sector. The paper also attempts to discuss various policy measures undertaken by the Government to strengthen Indian MSMEs. Finally, the paper proposes strategies aimed at strengthening the sector to enable it to unleash its growth potential and help make India a 20 trillion dollar economy.

International practices of using the cluster approach for the development of integration processes

The research paper considers the existing approaches to defining the essence of clusterization and clusters in foreign economies, and presents the analysis of conditions leading to the emergence and development of industrial clusters. Some practices of forming cluster structures in the developed countries are described. The role of industrial clusters in providing real economic growth and increasing efficiency of production is clarified. It is proved that using the cluster approach in Ukraine is a necessary foundation for a revival of regional manufacturing and thereby ensuring a high level of the national economy’s competitiveness. The aim of the article is to undertake an in-depth study of international concepts and axiomatic doctrines of integration processes on the basis of using the cluster approaches, which may become the foundation of applied research devoted to efficient functioning of industrial associations as a priority of structural modernization and acceleration of innovation andinvestment growth of the national manufacturing.The cluster approach has emerged from implementing a policy of foreign countries focused on the development of regions. Implementation of clustering in international activities clearly demonstrates its advancement and efficiency. An important factor of improving efficiency is the organizational factor associated with the regional association of manufacturers. The regions in whose territories clusters are formed become leaders in national economies and foreign economic relations.The study of the basic concepts of competition and global practices of business activities allows us to conclude that the theory of cluster mechanisms serves as a basis for establishing more successful firms and economic systems. Cluster systems combine the most effective and interconnected types of economic activity by grouping successfully competing firms that form the leading component of the whole economic system of the state and create competitive positions in the sectoral, national and global markets. The cluster approach, which was originally used to research issues of competitiveness of individual groups of enterprises, subsequently have become applicable in solving a wider range of tasks: the analysis of the competitiveness of the state, region, sector; as a basis of national manufacturing policy; as a basis for the interaction of big and small businesses.

IT Services in the Indian Economy

Global information technology (IT) spending has seen phenomenal increases over the last decade and a half. Amidst claims of increased productivity through greater IT usage in production processes, India, like some of the other developing countries, has adopted policies to facilitate the growth of the IT services industry. Such policies are adopted under the belief that the IT sector would also increase productivity of the economy through linkages, thereby facilitating development. In this article, input–output (IO) analysis for India reveals that both backward and forward linkages between the IT sector and other sectors of the economy have been stagnant and declining, respectively, over time. Although IT usage in terms of value added in a given sector has increased, it is much lower than in other developing and industrialized countries. I conclude by discussing some policy directions to improve India’s IT integration with the economy and improve domestic productivity, linking it with the national manufacturing policy, the recent ‘Make in India’ initiative and other policies of the Indian government which help ease doing business in India and development through usage of IT services.

Make in India - the Pros and Cons

Make in India is an international marketing strategy, conceived by the Prime Minister of India, Narendra Modi on 25 September 2014 to attract investments from commercial enterprises around the universe and make India the manufacturing Hub. The aim is to generate a percentage of manufacturing in country's gross domestic product from stagnant 16% currently to 25% by 2022, as stated in national manufacturing policy, and to create 100 million jobs by 2022. The major objective behind the initiative is to focus on 25 sectors of the economy for job creation and skill enhancement. Make in India is the key to revitalization of Indian economy. It is one of the schemes to tear back the economy from the clutches of recession. Manufacturing business in India initiative aims to adjust the composition of Indian GDP, which is the base cause of the recessional. Currently India's GDP is heavily weighted in favor of the service sector. Secondary research is practiced in the design of the work and this paper discusses about Make in India scheme, its opportunities, challenges, changes needed and some lessons of different investors, invested so far. Make in India campaign surely makes India an investment destination and global hub for manufacturing and innovation. Major hurdle is from environmental issues and clearances.

The liberalisation of India's labour laws within the National Manufacturing Policy 2011: where business power and social policy collide

Following formal economic liberalisation in 1991, business, in particular big business, has gained increasing access to and influence over policy decision-making in India. Industry has been an outspoken critic of national labour laws and has lobbied extensively for greater labour market flexibility. While business has not been successful in influencing “official” labour reform at the national level, it was able to influence labour policy within the National Manufacturing Policy 2011, which curtailed labour protections and implemented “hire and fire” policies. Utilising qualitative data from 40 face-to-face interviews with policy stakeholders in New Delhi, India, this paper aims to explore how business was able to influence labour reform within this policy as well as underscore the wider social welfare implications that may follow. It will be argued that the ability of business to dictate labour reform, while strong, is somewhat variable as competing factors serve to constrain business influence. Furthermore, the extent to which labour laws are hindering manufacturing investment is widely debatable. Nevertheless, curtailment of labour protections, as afforded in this policy, will have a widespread and damaging impact on workers. While the policy promises to empower rural youth, provide gainful employment, and enable growth to become more sustainable and inclusive for its citizens, it is questionable whether these goals can be achieved alongside the curtailment of labour protections.

An Assessment of Performance of MSMEs in India: With Special Reference to Odisha

The importance of Micro, Small and Medium Enterprise (MSME) has been recognised in recent years in both developed and developing countries for its significant contribution in gratifying various socio-economic objectives such as a higher growth of employment, promotion of exports and fostering entrepreneurship. The MSME sector is an important pillar of Indian economyas it contributes greatlyto the growth ofeconomywith a vast network of around 30 million units, creating employment of about 70 million, manufacturing more than 6000 products, contributing about 45% to manufacturing output and about 40% of exports, directly and indirectly. This sector even assumes greater importance now as the country moves towards a faster and inclusive growth agenda. Moreover, it is the MSME sector which can help realise the target of proposed National Manufacturing Policy of raising the share of the manufacturing sector in the gross domestic product from 16% at present to 25% by the end of 2022. The present paper is an attempt to focus the present status of the performance of MSMEs in India and Odisha in particular in terms of employment generation, number of units and capital formations. It also highlights the major challenges for the growth of MSMEs and initiatives taken to solve the constraints both at the government and institutional levels.

Revisiting the AVRO Case from Defence Production Policy and National Manufacturing Policy Centric Perspectives

This short paper examines certain contentious aspects of the AVRO Replacement case under progress by the Ministry of Defence in India. The analysis is based on perspectives focused on India’s Defence Production Policy and National Manufacturing Policy, in view of certain concerns raised by two other government bodies/departments and the Ministry’s recent decision to relook at the acquisition case in response. The paper culminates with some suggestions on a possible way forward that addresses the issues in dispute in a manner fully consistent with these two important government policies.

National Manufacturing Policy: A Fresh Look

The Manufacturing sector is widely recognized as a powerful instrument for socio-economic growth and balanced industrial development. The growth rate recorded by the manufacturing sector has normally been higher than that of the industrial sector as a whole. The manufacturing sector has emerged over five decades as a highly vibrant and dynamic sector of the Indian economy. World over, the contribution of the manufacturing sector to economic growth, diversification, employment generation potential, reduction of regional inequalities and higher export earnings are well recognized. The National Manufacturing Policy, which is the first such dedicated policy measure for the manufacturing sector in the country, is expected to change the manufacturing landscape of the Indian economy through increased capital formation; industrial infrastructure of global standards; technology upgradation; creation of innovation and vocational skill development infrastructure; and industry, worker, and environment-friendly regulations.

The Future of National Manufacturing Policy

over the issue of the correct growth strategy. A critical dimension of this debate has been the role the government should play in achieving desired growth rates. Nowhere has this struggle been more pronounced than in the debate over rationales for government support of the domestic manufacturing sector. Philosophies vary from a broadly activist government role to complete laissez faire. The optimal government role depends completely on the underlying economics. In this regard, leading economies have succeeded over time by investing in a set of assets and learning how to manage those assets effectively. The first industrial revolution (1750 to 1850) began as a rudimentary factory system in which small businesses used emerging crude machines and locally available supplies of power to manufacture a fairly limited range of products. By the second industrial revolution (approximately 1860 to 1910), production technologies based on numerous scientific developments had expanded to a wide range of product categories. The critical processing technology characteristics were mass production, interchangeable parts (i.e., standardization), and the assembly line. In the United States, massive investments in new types of infrastructure such as a national transportation network (particularly railroads), electricity, and an expanded and consolidated financial market were critical to the so-called Gilded Age of the late 19 century. The driver of advancement in process technology was the growing mechanization, not only of individual industries but also of entire supply chains, which created cheaper ways of making products. The key metric was achieving economies of scale. Machines were designed, plants were organized, and labor skills were specified in order to produce large volumes of undifferentiated products. As Henry Ford famously stated, “Any customer can have a car painted any color that he wants so long as it is black.” Economic historians will eventually pass judgment on the characteristics of the current drivers of manufacturing: information technology, nanoscience, and systems engineering. Still, regardless of when this information age is determined to

A national manufacturing policy: An industry perspective on promoting sustained improvement in U.S. global competitiveness

The United States needs a national policy for accelerating and sustaining productivity improvements to regain global manufacturing competitiveness. This paper establishes a basis for formulating such policy initiatives and supporting government actions. The need for national initiatives has been widely discussed. Many programs aim at improving the productivity and performance of United States manufacturing firms—including Department of Defense projects, National Science Foundation research grants to universities, and attempts to shape United States trade policy. Government policy makers appear to desire a proactive national manufacturing policy, but they lack a theory for selecting and integrating components of a meaningful policy. Such a “theory,” offered in this paper, would provide a foundation for effective initiatives. Critical factors necessary for competitive manufacturing success are identified, from an industry perspective, and the stimulants for an increasing level of productivity noted. Major trends that are changing the form and nature of manufacturing now and in the 1990s are described, along with their implications. A set of essential industrial needs is constructed for which national support could be useful. Finally, these needs are associated in a matrix with known and potential government programs. The conclusions and suggestions offered in this paper reflect common manufacturing-sector concerns. Although the information here is the result of a limited survey among a few industries, much consensus is evident. A more comprehensive study to extend this perspective is recommended, and should also include an assessment of conditions and needs within the small business community.