Government of India plans to increase the share of manufacturing sector in gross domestic product (GDP) from 16% to 25% by 2022 thereby creating 100 million new jobs. As per the second advance estimates of annual national income published by the Government of India, the Gross Value Added (GVA) at basic current prices from the manufacturing sector in India grew at a CAGR of 4.34 per cent between FY12 and FY18.

Since the late 18th century, the manufacturing sector has been a key engine of economic growth. With the right policies, the manufacturing sector can help bring about economic resurgence as it has the highest multiplier effect as compared to any other sector of our economy. Thus, the development of an emerging economy significantly depends on the performance and structure of its manufacturing sector.

The manufacturing sector presents new opportunities and challenges to business leaders and policy makers due to new technologies, discoveries etc thus helping a country grow and increase its GDP. In India, too, manufacturing is one of the largest contributors to the national GDP, directly & indirectly. Since manufacturing has substantial links with many other sectors, its output stimulates economic activity. As factory output grows, it requires more inputs from mining, utilities and suppliers leading to job creation and investment opportunities in sectors such as transportation, construction and retail.

Manufacturing is a complex function which involves strategic utilisation of technology, machinery, work force, skill etc. It leads to innovation of ideas that requires a workforce equipped with advanced technology skills. Hence, it can be regarded as a means of maximising employability in the country. As per the Labour Bureau’s Quarterly Report on Employment Scenario, the manufacturing sector added an estimated 89,000 jobs in the second quarter of 2017-18, a record that may be bettered in 2018-19. That is because no sector does more to generate broad-based economic growth – and, ultimately, higher living standards – than manufacturing.

Government of India plans to increase the share of manufacturing sector in gross domestic product (GDP) from 16% to 25% by 2022 thereby creating 100 million new jobs. As per the second advance estimates of annual national income published by the Government of India, the Gross Value Added (GVA) at basic current prices from the manufacturing sector in India grew at a CAGR of 4.34 per cent between FY12 and FY18. This shows that the target which has been set is not easy but it is certainly not beyond reach.

Riding on the ‘Make in India’ initiative, the country is on the path to becoming a hub for hitech manufacturing with global giants such as GE, Siemens, HTC, Toshiba and Boeing looking to set up units in India. They are attracted to the domestic market of 1.3 billion consumers with enhanced purchasing power. These positive business conditions will surely open various avenues of employment in India. But, then again, there are various challenges faced by the manufacturing sector in India such as poor infrastructure, disconnect from global supply chains, and restrictive labour laws that have obstructed growth and curtailed economic dynamism.

Finally, while the Government of India has taken various initiatives to boost the country’s economy leading to job creation, it is incumbent upon manufacturing companies to do their bit by way of imparting necessary skills to their existing & potential workforce. A coordinated effort involving industry participation in finalising skill development curriculum, ‘on the job’ training as part of skill development and making learning & development a priority in general will go a long way in ensuring that our demographic dividend can truly be realised.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house