It is the only sector that can create jobs and prevent the economic crisis from

deepening
In the last two decades, the Indian economy has witnessed a transformational change to emerge as one of the fastest
growing economies in the world.
Socio-political consequences
The Institute of Applied Manpower Research estimates that between 2012 and 2022, 8 to 9 million additional young
persons will join the labor force. Additionally, with productivity improvement jobs in agriculture are declining.
Therefore, India must create over 200 million jobs outside agriculture by 2025. A lot of these jobs will have to fall on
the manufacturing sector which has so far been a laggard. But failure to create the required amount of jobs will have
serious socio-political consequences.
The country has been happily importing large volumes of manufactured goods as its economy has grown, but it has
not been able to develop a large, competitive manufacturing base to dampen the need for imports and to export.
The two broad failures in India's development since the 1990s which explain why India's manufacturing sector has
languished are:

That the glaring failure to develop power and transportation infrastructure commensurate with the needs of
the economy
The absence of an industrial policy.

For the last 20 years, even the mention of the need for a concerted industrial policy for India has been taboo.
The National Manufacturing Policy which was introduced in 2011 is a belated departure from the policy neglect of
earlier years. It's goals are to create 100 illion addictional jobs in manufacturing by 2025 by accelerating the growth
of manufacturing to exceed the overall growth of the economy by an additional 2 percent to 4 percent annually.
Two points must be made here while mentioning these goals.
The summation of the bottom up plans made by the producers and policymakers associated with the various
manufacturing sectors results in the same numbers.
These plans were made when the forecast of growth of the economy was 8 per cent in the 12th Plan and
faster growth thereafter.
New Manufacturing Policy
It is imperative that three sets of actions are taken simultaneously to prevent a socio-political crisis. One is the
stimulation of overall economic growth which the new Governor of the Reserve Bank, the Finance Minister, and the
Prime Minister are focussed on. The second is the sorting out of the multiple policy and implementation problems
besetting Indias power and transport infrastructure that are now receiving high level attention in the PMO and the
Cabinet. The third is the implementation of plans to convert the New Manufacturing Policy to results.
The implementation plan to convert Indias Manufacturing Policy to results has been drawn up by 26 working
groups: 16 working on specific industries plans, and 10 working on cross-cutting issues that affect all industries,
such as the business regulatory environment and human resource and labour issues.
These plans converged on five major strategic thrusts to grow Indian manufacturing:

1. Improving the business regulatory framework

2. Human asset development
3. Improving technology and value addition in manufacturing
4. Developing effective clusters for growth of SMEs (small and medium enterprises)
5. National Investment and Manufacturing Zones (NIMZs)

Effective strategies for boosting the manufacturing sector and employment growth must satisfy three
important criteria:
i. Immediate impact on growth of employment
ii. Countrywide applicability
iii. Growth of the MSME (micro small and medium enterprises) sector

Accelerate action
Since we must stimulate manufacturing growth much faster and across the country too, we must turn to the
other four strategies listed above. Not only can these be implemented immediately; they require hardly any
money to implement which is a great advantage when the Finance Minister is constrained to squeeze plan
funds to reduce the fiscal deficit. To put more force behind these strategies, the following actions are
required:

Communicate the essentials of the Manufacturing Plan widely to politicians, policymakers, the public, and
to industry associations.
investment in the States and more jobs.
At the Centre, resolve inter-ministerial issues fast to facilitate induction of technology and increase value
addition in several sectors, including electronics, defense and capital goods.