Can the strategy of regional-resource based manufacturing help in promoting employment in India? (UPSC IAS Mains 2019 General Studies Paper – 1)
The National Manufacturing Policy aims to increase the share of manufacturing in the country’s GDP to 25% by 2022. However, It has been observed that the rate of development in certain areas is very fast due to some locational advantages with a high degree of industrialization while other areas lag behind. In this regard, regional manufacturing becomes very important.
Employment generation due to Regional-Resource based manufacturing
- Suitably organized industries can utilize raw materials in the area and thereby give a fillip to greater production and processing. This would help in overall regional development.
- Manufacturing creates employment in the industry at various levels of skills. Normally a good proportion of the employment is in the unskilled and semi-skilled labor field who can expect higher wages than the informal sector earning.
- The industry also creates opportunities for entrepreneurship and employment in ancillary industries and services in the secondary and tertiary sectors.
- There would be greater and more varied demand for consumer goods. This creates its own cycle of possible growth in local production, distribution and support in the secondary and tertiary sectors.
- It would also reduce the income gap between rural and urban areas and thereby reducing the distress migration.
Challenges to regional-resource based manufacturing
- While many states like Jharkhand, Chattisgarh have abundant mineral resources, it is the lack of adequate infrastructure — mainly roads and power — that has been a major roadblock.
- Lack of skills amongst people in these manufacturing industries.
- MSME sector which will have lion’s share in such a strategy are already facing challenges related to marketing, credit, growth, and non-availability of suitable technology for manufacturing, etc.
- Intellectual Property protection and enforcement are expensive and high risk in India.
In this regard, State and the Union government have come up with various strategies for harnessing the regional manufacturing potential-
- Orissa has also launched ‘Odisha Industrial Development Plan: Vision 2025’ the with focussed attention on five sectors that aim to attract investments of Rs. 2.5-lakh crore and generate direct and indirect employment opportunities for 30 lakh people.
- UP government’s One District, One Product scheme seeks to promote traditional industries synonymous with their respective districts to spur the local economy and create jobs.
- North East Industrial Development Scheme (NEIDS) encourages micro, small, and medium enterprises (MSMEs) to set up in the north-east region.
- Forest-based industries and Tribal Products are being encouraged in different states because of its ability to solve the problem of unemployment and poverty.
- Different states and regions harbor GI tagged products that could be manufactured locally and marketed globally.
The overall development of the country can happen only by securing a balanced and coordinated development of the decentralized manufacturing economy in each region.
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