Prof. D. Mukhopadhyay
Manufacturing sector is the prime enabler of socioeconomic development and the Industrial Revolution of the 18th Century’s contribution to make the world an industrial society from the agrarian economies of the Medieval Age is of herculean magnitude. It may be true that all the nations across the globe could not evenly transform their localized small-scale industries and agrarian societies to a strong industrial nation because of many arguments substantiating presence of developmental issues and challenges out of which the most prominent shortcoming responsible for Industrial backwardness was incapacity to absorb time honoured technology and adopting pro-industry education. As far as India is concerned, prior to the 1947 Partition, no sincere effort of the colonial rulers for economic development was observed. During post Partition period of five decades, industrial policy of India was highly protected, subsidy based and closed economic system consequence of which domestic industries couldn’t be competitive to required magnitude. Prolonged Industrial unrest, low technology absorbing capacity, lack of moderation, less priority on skill based human resource development and production of result-oriented management cadre personnel compared to other industrially developed countries made India as one of low productivity attributed capital-output-ratio countries and faced severe economic crises during early 1990s which created opportunities for Government of India to shift closed economic system to market driven production and distribution system which created space for getting tag of emerging economy. However, India could not initiate revamping the ailed manufacturing sector, upgradation and absorbing contemporary technology except certain mark of progress in pharmaceutical and information technology sector and the resultant benefits of these sectors made India not only sustain the burn of Pandemic but also extend her contribution to the cause of overcoming distress faced by other nations across the globe. As a matter of fact, IT sector acts as tool for strengthening production and distribution system and is devoid of the reason to be the substitute of manufacturing sector. India has been encountering many domestic challenges such as unemployment, less skilled and low mobility of workforce, shrinkage of international trade and consequently distress in the national exchequer and persistent decline in forex reserve to the tune of about $100 billion during last one year being a grave concern of the nation. Low skilled manpower leads to low productivity and high cost of production which makes Indian goods and services less competitive in international markets besides persistent quality issues and challenges.
Under the given situation, to revamp manufacturing sector is a burning issue. To combat adversary, India needs to invite more foreign institutional investors for investing in technological, professional, management and administration education sectors besides manufacturing sectors. Skill and education standards for the workforce need to be mapped keeping in view contemporary needs and global practices. It is very shocking that out of total workforce in unorganized sector, about 30% are illiterate, awarding purposeless Degrees by universities and institutions of higher education, scanty or absence of continuing education made Indian manufacturing less competitive in global scenario besides other challenges faced by Indian manufacturing sector. In order to facilitate mass employment, sustainable economic growth and social upliftment, manufacturing sector needs new blood transfusion in the forms of technically educated workforce, professionally qualified managerial personnel and IT savvy administrative support systems besides modernization of manufacturing system and change catalyst entrepreneurs.
Further, there is severe regional imbalances in terms of industrialization, labour mobilization and movement of managerial personnel. Substantial land mass of sovereign India is not for every kind of industry due to differences in climatic and topographical conditions. For instance, almost entire North-Eastern part of India has hardly witnessed any effort for industrialization during post partitioned era. It is now high time to identify the category of industries and manufacturing units suitable for the untapped regions of the country. A nationwide industrial culture needs to be sensitised. Investible resource is certainly a problem but strong political will and administrative efforts may certainly act as enabler of this vision. Insurgency, social disharmony, terrorism, geopolitical turmoil is some of the systematic hurdles but not the impossibilities. For industrialization.
Industrialization is considered to be the most effective economic growth engine as it has passed the test of time of two centuries since the18th Century Industrial Revolution. Manufacturing may be interpreted as cause of rapid technological changes, economies of scale, easy integration into global production and distribution networks. It may be observed that transformation from agriculture to manufacturing and shifting from manufacturing to services sector is certainly a progressive outlook of economic development but without manufacturing sector all are perhaps misnomer for less economically developed and emerging economies like India though many researchers are of the views that increasing importance of services sector in the world as well as phenomenal growth in IT sector may become the new economic growth engine in developing economies but IT sector can make much stride in creating economic spill over since IT is essentially and conceptually is meant for manufacturing sector. Therefore, it may be recommended that manufacturing should be main focus of industrialization and industrial policy with due weightage to service and IT sector. IT is a tool and means of production and distribution but not an end itself. India is attributed with high potential to emerge as one of the first order economies but manufacturing sector’s impetus can make it faster. India’s industrial and economic policies were more or less similar to that Chinese pattern of industrialization and her GDP was almost same till late 1980s and China turn around its production and distribution system since early 1990s whereas India initiated the same much later and also at very slow rate. Today, GDP of China is about thirteen times greater than India. The author of this write up is reasoned to opine that unprecedented economic growth engine of China is manufacturing sector and, of course, it nurtured and nourished service including IT sectors with due weightage in order as to bring about even and rapid socioeconomic growth. Manufacturing sector has been observed to have been the key enabler of economic growth for middle-income economies in the present economically advanced and technologically superior countries as to become technologically superior needs investment in research and development which is generally supported by rise in GDP. Many researchers observed that manufacturing in conjunction with service sector instead of the other way round is the cause of rapid economic growth and decline in manufacturing sector growth is one of the leading causes that affects economic growth not only in short run but more long-run too. Further developed manufacturing sector assists in providing employment which eventually promotes savings, accelerates pace for technological absorption and hence development is the end result.
Compared to other sectors, manufacturing sector needs more capital and investment which through multiplier effect increase income and later acceleration principle became active to promote climate for industrialization. Moreover, more skilled workforce and latest technology helps in achieving competitiveness both in domestic as well as international markets. These arguments substantially support the hypothesis that manufacturing sector plays a pivotal role in creating more employment, more income and culminating to economic wellness of people at large. Second hypothesis may spring from our analysis that service sector can significantly perform well if manufacturing sector becomes the central focus for creating spill over effect in the economy and the final supposition is derived that IT sector is not supplementary but complementary to both manufacturing and service sectors development. Therefore , recommendation for policy makers should be for simplifying production and distribution norms in order to attract more investment for manufacturing sector, investment for management, professional and technological education sector, capacity enhancement and skill upgradation, promoting industrialization in the virgin areas according to suitability and speciality of those regions of the country, making hassle free mobility of labour and workforce across the breadth and length of the country by removing restrictions of regionalism keeping in view that employability and productivity of workforce and managerial personnel vary from region to region depending on topographical and climatic conditions.
Therefore, the country should be empowered with quality education in technology, management, administrative sciences, professional education and promoting research and development in order to achieve sustainable development. Manufacturing sector’s contribution is of significant magnitude as far as India is concerned. To provide employment to workforce and managerial personnel attributed with different skill sets and education is possible only in manufacturing sector and an emerging economy. Service and IT sector’s growth is the derivative of manufacturing sector’s developmental growth and both the federal government and the provincial governments should top their agenda for focus on manufacturing sector’s development.
As far as developed economies are concerned, economic growth is primarily driven by knowledge-based innovation leading to endogenous growth models are more appropriate. But the middle- and lower-income economies like that of India, obstacle for economic development lies in resource mobilization, combination, allocation, utilization and intra-sectoral catch-up technological growth when these countries’ agenda for economic growth is hardly supported by existing research and technological innovation. Federal and provincial Governments should formulate strategy for promoting manufacturing sector development in time bound manner in order to achieve desired economic growth by 2047. Recently, Minister of Finance and Corporate Affairs, Government of India expressed her concern that the existing education system has failed to produce industry-ready graduates which implies that gap between campus and industry is persistently visible and educationists should come forward to mitigating the problem in time bound manner. Poor performance of manufacturing sector and relatively better performance of service including IT seems to be unworkable for ensuring sustainable long-term growth. However, Government of India appears to be serious to address issues and challenges for attaining growth in manufacturing sector, for instance ‘Make in India’ as an enabler of accelerating growth of manufacturing sector and many other schemes are on the priority agenda of the Government and these are expected to generate desired benefits in due course. Manufacturing sector needs a perpetual robust industrial policy and any ad-hoc policy is unlikely to be of any substantial effect. It is to keep in view the political, economic, social and cultural, technological, environmental and legal dynamics while formulating manufacturing sector developmental policy along with cost efficiency, price competitiveness and products uniqueness in order to mitigate challenges in international market besides inland competitors. Therefore, investment for manufacturing sector’s capacity enhancement should be the central focus of the policy formulators and decision makers.
(The author is an Educationist and Former Interim Vice Chancellor, SMVD University.)
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