- As we are aware, the Prime Minister Narendra Modi-led Union Government is absolutely gung-ho about India joining the ranks of the most developed nations in the world by 2047. The aspirational society will truly realise its potential in every conceivable economic parameter is being exhorted at every given opportunity and platform. It is to drive home the point of India becoming one of the most advanced nations. The moot point to ponder over here is whether our decision-making and economic policies are aligned with the exalted objective in the first place. Note that India continues to be a largely agrarian-based economy what with more than 50% of the people dependent on the same. How to wean away this humongous demography into other verticals?
PC: Manufacturing Today India
- Undoubtedly, the services sector is doing a fabulous job. However, the concern is the manufacturing sector that hasn’t really taken off on expected lines despite concerted efforts from the think tank. Manufacturing growth isn’t keeping up with GDP growth, indicating a problem that needs immediate fixing. Taiwan, less than 0.4% the size of China, ensures its safety by making 90% of the world’s silicon chips. It’s indispensable, hence untouchable in a good way. That’s the power of manufacturing. So, when you read India’s GDP data for Jan-March, paying attention will be revealing. The good news is that growth accelerated to 7.4%, better than China’s 5.4% in the same quarter. But most of it happened in construction, especially government-funded projects.
PC: OpIndia
- Most worryingly, manufacturing grew at a modest 4.8% despite government PLI schemes for sectors like electronics and solar equipment, and the front-loading of orders by US importers anticipating Trump tariffs. Notably, Apple alone lifted five planeloads of iPhones in the last week of March. Given global uncertainty, it’s time to assess manufacturing as a national priority as we enter the third month of this fiscal. On paper, it has been the government’s focus for years, yet its share in GDP is stagnant, 15% in 2014, 17% now in 2024. The government’s 25% target remains elusive. In China, despite its 4.5x larger economy and five years of China+1 sourcing policies, manufacturing accounts for 26% of GDP.
PC: DefenceXP
- India’s GDP is projected to grow at 6.5% this fiscal, well below the asking rate of 8% for reducing poverty. Manufacturing is key to the required quantum leap. It’s a political necessity to employ youth that GCCs and other white-collar operations can’t absorb. After Op Sindoor, it’s also a security imperative. A nation of 1.4bn should be making its own drones, planes, and missile shield. But assembling iPhones is only a step, not a goal, because it does not give us Taiwan-like manufacturing clout. We need more foreign investment, but also domestic R&D to get ahead in emerging technologies. PLIs won’t get us there, as half of India’s phone-making capacity is unutilized. We need political will to ensure the manufacturing sector takes off exponentially.
