Question 1 · 10 marks · 168 words written
Opening · a definition
The concept of "Missing Middle" in India's industrial ecosystem highlights the absence of Mid-sized industries in industrial ecosystem.
Indian Industrial ecosystem is dominated by MSMEs & then there is large No. of big Industries but scalable middle Industries are absent.
Reason:
Body · points
(i) Intentional Dwarfism to continue to get MSME benefits. (ii) Red tapism & Regulatory hurdles also prevent growth (iii) Lack of specific schemes & incentives to cater Middle sector
Effect of Missing Middle on India's Growth & Employment
(i) High Informalization of workforce (More than 90% employed in informal sector)
(ii) Checks growth of Economics of scale
(iii) Low contribution of Industrial manufacturing to overall GDP (27%) & continous low growth rate.
(iv) Low tax base for State to tax.
(v) Absence of resilient supply chains.
(vi) Low domestic research & innovation in Industries.
Way forward
- Middle Industries Specific Incentives like PLI.
- Special Incentives to check Dwarfism.
Close · a way forward
Thus, "Missing Middle" can be the missing puzzle of India's Industrial growth story which need to be fixed.