Why does India need Manufacturing Growth?


Over the past few decades, the service sector in India has provided employment opportunities for the citizens of the country.

Due to this, the manufacturing sector has remained weak. India needs an upgrade in manufacturing as the service sector cannot recover after two Covid pandemic waves in the country.

Lack of progress In the manufacturing sector

Service-oriented jobs like airlines, hotels and malls were the first to fall during the covid outbreak and lockdown, which in India accounts for 55 per cent of India’s economy.

The downfall in the industry has led many people to seek employment in the manufacturing industry.

The manufacturing growth has been minimal despite getting cheap labour and many other resources.

The service sector always played a massive part in the development of the Indian economy.
Many reports suggest that India’s manufacturing sector started slowing down after demonetizing Indian currency in 2016.

The government of India focused on the manufacturing economy but failed to achieve its goals several times due to a lack of infrastructure.

In 2014, Make in India introduced a government initiative. Its objective was to encourage companies to manufacture in India.

It aimed to increase its manufacturing sector to 25 per cent of the GDP (Gross Domestic Product).

In 2016, Startup India, another government initiative, was introduced to encourage entrepreneurs around the globe to transform the country into job creators instead of job seekers.

However, experts suggested that due to lack of infrastructure, their goals will get accomplished by 2025 or 2030.

In May, the centre of economic data and analytics said that the manufacturing sector’s employment is nearly half what it was five years ago.

The manufacturing sector accounts for a total of 17 per cent of India’s GDP. In the year 2016-17, the industry employed over five crore Indians.

The same has declined to 46 per cent to reach 2.73 crore Indians in 2020-21.

The industry has shown growth in the first few months of FY22, and it is due to the low base effect after last year’s damage by the Covid pandemic to the manufacturing sector.

The government needs to focus on manufacturing as it is still weak.

Why does India need to shift its focus on manufacturing?

As the service sector dominates the Indian economy and suffered considerable losses in the Covid pandemic, India needs to grow and upgrade manufacturing.

The jobs in the service sector suffered maximum damage and were the first to collapse during the lockdown.

The lockdown resulted in the loss of many jobs and shut many businesses and business operations down. It led to a decline of 54 per cent in the country’s GDP and unemployed millions of Indians.

As the manufacturing sector is still weak, it has become challenging for Indian citizens to find jobs, even after twice rebounding from the covid outbreak.

Many people were forced to go back to farming due to a lack of employment.

Jobs are not the only reason to level up India’s manufacturing sector; focusing on manufacturing is necessary for future growth potential, which would struggle if we are only dependent on agriculture and service.

Now is the time; India lays a perfect and well-structured foundation for the manufacturing sector employing many more million Indian citizens.

Manan Khandelwal
Manan Khandelwal
A student of Mumbai University, an avid fantasy reader and a football enthusiast


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