{"id":53275,"date":"2019-10-21T11:51:18","date_gmt":"2019-10-21T06:21:18","guid":{"rendered":"https:\/\/blogadmin.forumias.com\/?page_id=53275"},"modified":"2019-10-21T11:51:25","modified_gmt":"2019-10-21T06:21:25","slug":"answered-strengthening-the-manufacturing-industry-and-increasing-domestic-demand-are-key-imperatives-for-job-creation-and-inclusive-growth-discuss","status":"publish","type":"page","link":"https:\/\/forumias.com\/blog\/answered-strengthening-the-manufacturing-industry-and-increasing-domestic-demand-are-key-imperatives-for-job-creation-and-inclusive-growth-discuss\/","title":{"rendered":"[Answered] \u201cStrengthening the manufacturing industry and increasing domestic demand are key imperatives for job creation and inclusive growth.\u201d Discuss."},"content":{"rendered":"\n
Demand of the question<\/strong>
Introduction. <\/strong>Contextual Introduction.
Body. <\/strong>Reasons behind low manufacturing and low demand. Some measures to boost manufacturing and demand.
Conclusion. <\/strong>Way forward. <\/td><\/tr><\/tbody><\/table>\n\n\n\n

India has grown at about 7-8 % in recent years. But data and facts shows that Indian growth was jobless and not inclusive. According to Census 2011, the average growth rate of the economy was 7.7 per cent per annum, when it was only 1.8 per cent for employment. 66th round of the National Sample Survey Office (NSSO) data on employment in 2011 revealed that between 2004-05 and 2009-10, only 1 million jobs were added per year; in a period when the economy averaged a record 8.43% growth annually.<\/p>\n\n\n\n

Reasons behind the low manufacturing and\nlow demand:<\/strong><\/p>\n\n\n\n

  1. Stagnation in manufacturing output and\nemployment contraction: <\/strong>Less jobs were created due to stagnant\nmanufacturing output and contraction of labour-intensive segment of the formal\nmanufacturing sector. This is due to excessive rigidity in the manufacturing\nlabour market and rigid labour regulations has created disincentives for employers\nto create jobs. According to world bank study Industrial Disputes Act has\nlowered employment in organised manufacturing by about 25%.<\/li>
  2. Service sector driven growth:<\/strong> The biggest\nemployer in India is the Agriculture sector, employing 45% of the population\nbut it contributes only 15% to the GDP, whereas Service sector is the biggest\ncontributor to the GDP but employs less than 30%. IT and Financial services are\ndrivers of service sector growth in last 2 decades however both of these sector\nare not employment intensive. This is contributing to jobless growth in India.<\/li>
  3. Import-oriented economy: <\/strong>Excessive\nimports have been damaging Indian manufacturing industry. India has failed to\nwitness a strong growth in the labour-intensive segment of the manufacturing sector,\nas it did not move from the import to an export-oriented development strategy.\nIf India had followed Labour intensive goods export-led model like Southeast\nAsian countries, it would have created many jobs in the MSME sector.<\/li>
  4. Low demand: <\/strong>Low demand has led to slow\neconomic growth and led to loss of jobs of many due to loss to companies. This\nis mainly due to less lower purchasing power and concentration of wealth in\nhands of few.<\/li>
  5. Infrastructure Bottlenecks: <\/strong>Infrastructural\nbottlenecks (especially in access to electricity), lack of backward and forward\nlinkages between agriculture, industry and service sector has failed to create\njobs and also hindered growth of labour intensive sectors.<\/li>
  6. MSME problems: <\/strong>The labour intensity of\nMSME is four times higher than that of large firms. But they face many\nproblems. They have poor access to credit and are plagued by many serious\nproblems which has limited there growth potential.<\/li>
  7. Skill Mismatch: <\/strong>Indian labour is not\nskilled as per industrial demands. Lesser skill levels of workers limit them\nthe job opportunities. Also various programs by government like Skill India and\nstand up India are launched recently only. Industry focussed skills are needed\nto be inculcated.<\/li><\/ol>\n\n\n\n

    Some measures to boost manufacturing and\ndemand:<\/strong><\/p>\n\n\n\n

    1. Labour reforms:<\/strong> Labour Laws should be\nreformed as due to the stringent Labour Laws Corporates  in India are preferring Capital intensive\nmode of Production in a country where labour is abundant.<\/li>
    2. Promoting labour Intensive sectors:<\/strong>\nLabour intensive sectors like food processing industry, leather industry,\napparel, electronics, gems and jewellery, financial services, and tourism etc.\nshould be encouraged. Appropriate subsidies and tax incentives should be given\nto incentivise them. Make in India initiative a great step forward which will\nboost the manufacturing.<\/li>
    3. Strengthening MSME: <\/strong>MSME sector should be\npromoted and supported. Easing regulations, subsidies will help. Also easy\navailable of credit should be the priority. MUDRA has a potential to create\nrequired jobs in India.<\/li>
    4. Implementing Niti Ayog action agenda: <\/strong>The\nAction Agenda has provided several good ideas for job creation, including\nlabour law reforms at the state level. The report emphasizes the role of\nexports in job creation and recommends establishing coastal employment zones\n(CEZs), similar to China\u2019s special economic zones (SEZs). This agenda must be\nimplemented in letter and spirit.<\/li>
    5. Entrepreneurship: <\/strong>The focus of economic\npolicy must be on creating an enabling policy for youth to take up\nentrepreneurship and create more jobs in the market. India does not need five\ncompanies worth 5000 crores turnover but needs 5000 companies of 5 crore\nturnover.<\/li><\/ol>\n\n\n\n

      With higher growth rates not having translated into more jobs, the government should formulate a National Employment Policy that takes these trends into account. Expansion of public employment and a national skilling programme could boost employment.<\/p>\n","protected":false},"excerpt":{"rendered":"

      Demand of the question Introduction. Contextual Introduction. Body. Reasons behind low manufacturing and low demand. Some measures to boost manufacturing and demand. Conclusion. Way forward. India has grown at about 7-8 % in recent years. But data and facts shows that Indian growth was jobless and not inclusive. According to Census 2011, the average growth… Continue reading [Answered] \u201cStrengthening the manufacturing industry and increasing domestic demand are key imperatives for job creation and inclusive growth.\u201d Discuss.<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":49132,"parent":0,"menu_order":0,"comment_status":"open","ping_status":"closed","template":"","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"class_list":["post-53275","page","type-page","status-publish","has-post-thumbnail","hentry","entry"],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/53275","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=53275"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/53275\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media\/49132"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=53275"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}