Question 1 · 10 marks · 152 words written
Opening · a figure
India aims to revitalise its manufacturing sector to make it $1 trillion by 2025.
Importance of manufacturing sector
Body · points
- Production based economy is important to reduce poverty.
- Important to not fall in middle income trap.
- Create demand and increasing purchasing power simultaneously.
- Create self reliance and reduce dependence on imports.
- Boost large scale employment.
Need for new Industrial Policy
- Stagnant contribution of manufacturing at ~25% of GDP.
- Address perverse incentive of MSME to stay small.
- Ensure job oriented growth and reduce disguised unemployment of agriculture.
- Improve exports and hence reduce CAD (which is at 2.4%).
- Develop a virtuous cycle of growth and employment by nudging manufacturing sector to perform better.
- Reduce dependence on agriculture (49% of labour force) and sustain service sector.
- Develop electronics market in India.
Close · a summary
Hence a New Industrial Policy is need of the hour to boost manufacturing sector.