{"id":195591,"date":"2022-07-14T17:32:22","date_gmt":"2022-07-14T12:02:22","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=195591"},"modified":"2022-07-14T17:32:22","modified_gmt":"2022-07-14T12:02:22","slug":"india-inc-could-play-a-lead-role-in-our-economys-global-emergence","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/india-inc-could-play-a-lead-role-in-our-economys-global-emergence\/","title":{"rendered":"India Inc could play a lead role in our economy\u2019s global emergence"},"content":{"rendered":"\n

Source<\/strong>: The post is based on an article \u201cIndia Inc could play a lead role in our economy\u2019s global emergence\u201d published in the Live Mint on 13th<\/sup> July 2022.<\/p>\n

Syllabus<\/strong>: GS 2 Indian Economy. Issues and Challenges Pertaining to Growth and Development; Industrial Policy<\/p>\n

Relevance<\/strong>: Role of India Inc. in Indian Economy<\/p>\n

News<\/strong>: In recent years, India has emerged as one of the world\u2019s fastest growing major economies. It is expected to be among the top 3 in the next 2 decades.<\/p>\n

In this context, the Government of India (GOI) announced its aim to move from the status of a $3.2 trillion economy<\/strong> to a $5 trillion economy<\/strong> within this decade.<\/p>\n

Journey of India\u2019s growth so far <\/strong><\/p>\n

(A) Pre-Independence: <\/strong>The British Raj had impoverished India till India became Independent. In this context, the Former PM Manmohan Singh<\/strong> once commented, \u201cThe brightest jewel in the British crown was the poorest country in the world in terms of per capita income at the beginning of the 20th century.”<\/p>\n

(B) Post-independence<\/strong>: The government established a number of public sector enterprises (PSEs), especially in the heavy industries sector, which were called the \u201ctemples of modern India\u201d. <\/strong><\/p>\n

(C) Post-1991: <\/strong>The economic liberalization<\/strong> allowed the private sector to play a pivotal role in a free market economy.<\/p>\n

(1) The services sector <\/strong>was focused. Therefore, the sector grew and thus contributed more than half of India\u2019s gross domestic product (GDP)<\/strong> at present. The sector also attracts 55% of foreign direct investment (FDI).<\/p>\n

(2) Initially, the manufacturing sector<\/strong> remained laggard. However, in recent years, the government has launched Skill India, Digital India <\/strong>and Startup India<\/strong> initiatives and has been focussing on \u201cMake in India, Make for the world”.<\/strong><\/p>\n

(3) The government is focussing on major infrastructure and logistics projects for India to leapfrog into a new era of growth. This is because Former US President John F. Kennedy once said, \u201cAmerican roads are not good because America is rich. America is rich because American roads are good.”<\/strong><\/p>\n

Key challenges remain for Indian enterprises<\/strong><\/p>\n

First<\/strong>, India\u2019s ease of doing business climate <\/strong>remains inadequate. For example, industrial projects find it difficult to get contiguous land parcels and timely environmental and regulatory clearances.<\/p>\n

Therefore, India\u2019s manufacturing<\/strong> sector could increase its share in GDP from 15.3% to 17.4% in 2 decades ago. In contrast, Vietnam\u2019s manufacturing sector more than doubled its share of GDP in the same period.<\/p>\n

Second,<\/strong> the cost of doing business in India is high. There are various regulatory<\/strong> and bureaucratic procedures<\/strong> that ultimately hurt India\u2019s image and chances of becoming a preferred global manufacturing destination<\/strong>.<\/p>\n

Third,<\/strong> India\u2019s labour productivity is very poor. For example, Manufacturing productivity in Indonesia is twice India\u2019s, while in China and South Korea it is four times higher. This happens due to \u2018chalta hai\u2019 <\/strong>(anything goes) attitude.<\/p>\n

Fourth,<\/strong> there are inconsistencies<\/strong> in the government\u2019s <\/strong>policies. For example, Court judgements had cancelled 2G licences and coal block allocations.<\/p>\n

Way Forward<\/strong><\/p>\n

The government should ensure ease of doing business<\/strong>. For example, it can adopt a single-window clearance system<\/strong> for regulatory approval<\/strong> and other aspects.<\/p>\n

In order to compete globally<\/strong> and move up the value chain to more value-added categories<\/strong>, there is a need that Indian firms work on scale and quality<\/p>\n

We need to fix the labour<\/strong> productivity issues<\/strong>. There is a need for upskilling of our workforce<\/strong> in order to become an attractive destination<\/strong> for global manufacturers.<\/p>\n

Indian enterprises should be given support<\/strong> and encouragement<\/strong> to expand their operations on a global scale <\/strong>here in India. This will encourage global prospective investors<\/strong> to look at India as a favourable manufacturing destination.<\/p>\n

The government should make robust policies<\/strong> which remain consistent because it is fundamental to investor confidence. It is good that the government has ensured regular auctions of coal blocks for commercial use.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source: The post is based on an article \u201cIndia Inc could play a lead role in our economy\u2019s global emergence\u201d published in the Live Mint on 13th July 2022. Syllabus: GS 2 Indian Economy. Issues and Challenges Pertaining to Growth and Development; Industrial Policy Relevance: Role of India Inc. in Indian Economy News: In recent… Continue reading India Inc could play a lead role in our economy\u2019s global emergence<\/span><\/a><\/p>\n","protected":false},"author":10328,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[212,10501],"class_list":["post-195591","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-2","tag-live-mint","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704900317},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/195591","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10328"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=195591"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/195591\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=195591"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=195591"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=195591"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}