As India aspires to become a $5 trillion economy by 2025, one sector that is deemed crucial in achieving this target is manufacturing. The Indian manufacturing sector has been growing at a steady pace, and amidst a global pandemic, the government’s Industrial Development Policy (IDP) 2017 has played a significant role in shaping its future.
The IDP 2017 was launched with a primary objective of boosting manufacturing and adopting the latest technologies to foster innovation and increase productivity. The policy has set ambitious targets of increasing the share of manufacturing in India’s GDP to 25% by 2025, creating 100 million new jobs, and raising the contribution of manufacturing to India’s total exports to a whopping 40%.
The government recognized the importance of better infrastructure and introduced measures to improve logistics, such as the dedicated freight corridors and the Bharatmala Pariyojana. It also emphasized technology adoption by introducing initiatives such as the ‘Make in India’ program, Aatma Nirbhar Bharat Abhiyan, and Production Linked Incentives (PLI) schemes to improve the competitiveness of the manufacturing sector.
Moreover, the IDP 2017 gave due importance to skill development and training of the workforce to meet the industry’s changing demands. The National Skill Development Corporation (NSDC) and other programs have been introduced to bridge the skill gaps and upskill the workforce.
The IDP 2017 is already bearing fruit – India’s manufacturing sector’s growth rate accelerated to a six-year high of 8.3% in October 2020, according to IHS Markit’s Purchasing Managers’ Index (PMI) data. Several sectors are reaping the benefits of the policy, such as the automobile sector, which saw a surge in demand and sales due to the PLI scheme.
However, despite several positive outcomes, the IDP 2017 has faced challenges such as slower than expected progress towards achieving set targets, higher dependence on imports of key raw materials, and the need for a more conducive environment for fostering innovation.
Nonetheless, the IDP 2017’s role in shaping India’s manufacturing sector’s future cannot be ignored. The policy has provided a clear roadmap for the sector’s growth, comprising initiatives to improve infrastructure, incentivize investments, and boost skill development. If implemented correctly, it would indeed be instrumental in realizing India’s dream of becoming a $5 trillion economy by 2025.
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