A new industrial policy for Bharat: 

A new industrial policy for Bharat: 

Context:

The Department of Industrial Policy and Promotion, Ministry of Commerce and Industry initiated the process of formulation of a new Industrial Policy recently.

Introduction:

• Since the last Industrial Policy announced in 1991, India has transformed into one of the fastest growing economies in the world. With strong macro-economic fundamentals and several path breaking reforms in the last three years, India is equipped to deploy a different set of ideas and strategies to build a globally competitive Indian industry.
• The new Industrial Policy will subsume the National Manufacturing Policy.
• A Task Force on Artificial Intelligence for India’s Economic Transformation has also been constituted which will provide inputs for the policy.

Why there is need for new industrial policy?

• A recent report by Deloitte LLP pointed out that India’s young population will drive its economic growth to overtake China and other Asian tigers in the next few decades.
• The potential workforce in India is set to increase from 885 million to 1.08 billion in the next 20 years.
• In this context the discussion paper on Industrial Policy 2017, released recently by the Department of Industrial Policy and Promotion (DIPP), becomes relevant.
• The new industrial policy aimed at building a globally competitive Indian industry equipped with skill, scale and technology.
• It is proposed that the new Industrial Policy will aim at making India a manufacturing hub by promoting ‘Make in India’.
• It will also suitably incorporate the use of modern smart technologies such as IOT, artificial intelligence and robotics for advanced manufacturing.
• The Economic Survey 2016-17 pointed out that he richer peninsular states in India will witness a sharp increase in working age populations, followed by a sharp decline.
• It is an opportunity to address the problems of low Research & Development spending and tough competition from cheap Chinese imports
• Micro, the small and medium enterprises sector facing tough competition from cheap imports from China and other countries with which India has free trade agreements
• It recognizes the need to gainfully employ a growing workforce

What needs to be done?

• For India to realize its economic potential, it is this young population which needs to be tapped and provided opportunities.
• Significant migration in search of better sources of livelihood is also being witnessed from such areas towards urban centres, which needs to be carefully managed.
• A new industrial policy for India must necessarily discuss ideas for creating jobs for and in Bharat.
• There is need to promote competition, enhancing the competitiveness of domestic industry, and strengthening global linkages and value chains.
• Any design of industrial policy must appreciate its linkages and interaction with agriculture and services policies
• It is important to institutionalize such a whole-of-government approach and authorize a powerful nodal department in the prime minister’s office to ensure coherence through coordination with different departments and related stakeholders, and enable swift decision making within predetermined time frames.
• Any industrial policy design must note its linkages with agriculture and services policies at a granular level, and with trade and competition at a broader level.
• India’s new industrial policy must focus on improving overall competitiveness and avoid the lure of protectionism.

Conclusion:

A new forward-looking industrial policy for India must have Bharat as its soul. It must prioritize the creation of livelihoods in rural and semi-urban areas, and should recognize the importance of growth in the rural non-farm and agriculture-allied economy for industrial development.

A long-term view needs to be taken on competition and trade-related issues, and the industrial policy should avoid the temptation of short-term benefits of over-protectionism.