Page 11 - Artha

Focus Story

5. Investing in Digital the Ease of Doing Business and solar modules. promote a culture of
Transformation and (EoDB) are transforming India 2. Developing industrial innovation and support the Private
Industry 4.0 technologies, into a preferred destination corridors and clusters, creation of new products and
such as Artificial for global investments. These which provide solutions.
Intelligence, Robotics, initiatives are pivotal in state-of-the-art These changes are solidifying
Internet of things, and driving economic growth and infrastructure, connectivity, India's position on the global Investment as
Cloud computing, which fostering a conducive and facilities for stage. With the mantra of
can improve productivity, ecosystem for businesses to manufacturing units. These “Minimum Government,
efficiency, and innovation. thrive. At a Government level, include the Delhi-Mumbai Maximum Governance,” India
some steps that India is taking
6. Strengthening Human Industrial Corridor, the continues to foster an a Catalyst for
Capital and Skill to improve the manufacturing Chennai-Bengaluru ecosystem where businesses
Development, especially footprint are as follows: Industrial Corridor, and the can thrive and contribute to the
in the areas of Science, 1. Implementing the Amritsar-Kolkata Industrial nation's economic growth.
Technology, Engineering, Production Linked Corridor. India's Economic
and Mathematics (STEM), Incentive (PLI) scheme, 3. Boosting research and
which are essential for the which provides incentives development (R&D)
future of manufacturing. to domestic and foreign capabilities and fostering THESE INITIATIVES ARE
manufacturers for innovation and PIVOTAL IN DRIVING
These steps, along with the increasing their production entrepreneurship. The ECONOMIC GROWTH Growth
existing initiatives of the in India and enhancing their Government has launched AND FOSTERING A
Government, can help India exports. The scheme several initiatives, such as CONDUCIVE
realize its potential as a global covers 14 key sectors, the Atal Innovation Mission, ECOSYSTEM FOR
manufacturing hub and a key including electronics, the National Research BUSINESSES TO
player in the post-pandemic automobiles, Foundation, and the THRIVE
world. The Government's pharmaceuticals, textiles, Startup India program to
concerted efforts to improve I ndia’s remarkable ascent to marginally higher than the
pre-covid estimate of 10.8
emerge and retain the tag of
the fastest-growing major per cent in 2019-20.
economy globally for the third
year in a row is a testament employment opportunities
anufacturing is a key These initiatives need to be 1. Create a Culture of 3. Leveraging our to its resilience amidst Share of Private Corporate Sector GFCF in GDP for India’s large and growing
(%)
population, thereby
driver of economic complemented by a Quality and Strengths in Sectors like uncertain global environment. 11.2
growth, employment, comprehensive and coherent Competitiveness in the Construction Equipment, This strong growth trajectory 11.0 10.9 promoting inclusive growth.
Therefore, private investment
innovation, and exports. India strategy that addresses the Industry. If India has to Textiles, Pharmaceuticals, is attributable to the thriving 10.8 10.8 can play a central role in
has a large and diverse structural and systemic compete with the rest of Automobiles, and manufacturing and services 10.6 financing the development of
manufacturing base and today challenges. While there can be the world, it has to be on Electronics, and diversifying sector, buoyant domestic 10.4 10.4 the economy and helping it
Indian manufacturing has various aspects which are the basis of merit of the into new and emerging demand and government’s 10.2 10.3 achieve the vision of a
gained respect the world over. structural based, there are product or the service areas like Capital Goods, emphasis on capital formation. 10.0 10.0 developed country by 2047.
certain factors which the being offered. This culture Renewable energy, 9.8
To achieve its vision of industry needs integrate of excellence has to down Biotechnology, and PUBLIC CAPEX PUSH Cross-country empirical
analysis of 62 episodes of
becoming a US$5 trillion within itself if it has to to the last level, the SMEs, Aerospace. 2018-19 2019-20 2020-21 2021-22 2022-23 growth spurts from 1960 to
economy by 2025, India needs compete with the rest of the where the bulk of the HAS REVIVED THE Source: CSO, MoSPI 2011 among non-OECD
to significantly accelerate its world. manufacturing actually 4. Enhancing our INVESTMENT CYCLE countries underscores that
manufacturing growth and takes place. integration with Global sustained economic
enhance its global 2. Developing and Value Chains (GVCs) As India sets its sight to while sticking to the fiscal development is largely driven
competitiveness. The upgrading our and regional trade Owing to the significant become a developed glide path. Private investment by private investment
Government has launched Industrial Clusters and agreements (RTAs), which capex push by the economy by 2047, revitalizing can keep this momentum of (Economic Survey 2018-19).
several initiatives to promote corridors, which can can offer opportunities for government, India’s private investment will be the investment cycle going by Notably, China's
manufacturing, such as Make provide economies of scale, market expansion, investment cycle has revived key to sustaining a high bringing in infusion of capital investment-led growth model
in India, Atmanirbhar Bharat, better infrastructure, and technology transfer, and since 2020-21. Private sector growth trajectory. without exacerbating the in the late 2000s exemplifies
Production Linked Incentive access to skilled labour and quality improvement. capex has also started Government has provided the public debt burden, and the substantial impact of
(PLI) scheme, and National markets. showing signs of resurgence, necessary initial push through harnessing the country’s private investment, resulting
Infrastructure Pipeline. with GFCF of private substantial public capex. resources, thus driving
corporate sector rising from However, sustaining this productivity. It has the in exorbitant levels of growth
10.0 per cent in 2020-21 to momentum is challenging capacity to generate compared to other
10.9 per cent in 2022-23, developing countries.

10 ANALYSIS, RESEARCH, THOUGHT LEADERSHIP & ADVOCACY ANALYSIS, RESEARCH, THOUGHT LEADERSHIP & ADVOCACY 11
QUARTERLY JOURNAL OF ECONOMICS
QUARTERLY JOURNAL OF ECONOMICS
AUGUST 2024 AUGUST 2024