The manufacturing sector boosts the economy of a country and hence very crucial for the country’s economical development. The Indian manufacturing sector holds the capacity to uplift the economical standard of the country and also to employ a large number of people. The sector can even help in boosting the trade of the country. Development of manufacturing sector leads to more production which leads to more export. But the lack of attention and government support have resulted in the declined of manufacturing sector’s contribution to the GDP over the years. GDP reflects value the of each economy. The more is the GDP , the more is the value of an economy. The GDP contribution of the manufacturing sector in India was reduced from 16.2% in 2010-11 to 15.7% in 2011-12.
The contribution of manufacturing sector to the Indian economy have sharply reduced over last some years. This sector is almost bleeding and require proper support and assistance. Some government initiatives can help in strengthening the Indian manufacturing sector. China holds the same economical system of mixed economy as India, but it puts required amount of emphasis on the manufacturing sector. 45.31% of China’s GDP was counted for the manufacturing sector in the year 2012. The Indian manufacturing sector experienced worst annual performance in 2013 in last three decades. China is the largest exporter in the World and its manufacturing sector gets great support from the government policies and programs. On the other hand, the Indian government has not taken any such initiatives from late 4-3 years.
Budget 2014-15 and emphasis on the manufacturing sector:
Finally the government has recognized the importance of development of the manufacturing sector and decide to do something about it. In the budget of 2014-15, the Finance Minister of India, has suggested some of the initiates to boost the performance of the manufacturing sector. Some of the highlighted initiatives include:
- A goal is been set by the National Manufacturing policy to achieve 25% of GDP from the manufacturing sector and to generate 100 millions of jobs in the sector over a decade.
- The announcement of reduction of taxes on different products ranging from cars to soaps, to further support the manufacturing sector
- It is expected that the merchandise export will reach USD 326 billion, showing a growth rate of 6.3% in comparison of the previous year.
- Support of investment in the manufacturing sector will boost the overall production
- Additional manufacturing machines and capabilities are proposed to be installed in major manufacturing industries like steel, cement, power electricity etc.
Budget 2014-15 is expected to heal the damages of the manufacturing sector caused over year due to limited investments and efforts. The manufacturing sector will act as a key for reviving the country’s economy.