18th Lok Sabha term: Manufacturing is an essential matter

The state of the manufacturing sector in India will be a dominant issue that will influence the voters’ choice in the 18th Lok Sabha elections that are expected to take place in 2024. As a vital component of the Indian economy, Manufacturing contributes about 15% ± 2% of the GDP by engaging over 50 million citizens. It is also a strategic sector to enhance India’s self-reliance, trade balance, and global competitiveness.

Whereas, the average active period of Indian manufacturers turned out to be 9.4 years in a 2018 research by the Centre for Monitoring Indian Economy (CMIE), with the mining sector being the lowest active time (5.8 years) and the agriculture sector being the longest duration (11.9 years). Most manufacturing enterprises had to shut down or are operating at reduced capacity due to frequent supply chain disruptions and demand shocks. The manufacturing sector in India faces serious challenges, such as low productivity, high costs, poor quality, lack of innovation, and inadequate infrastructure. Therefore, strategic reinforcement of the sector is crucial for the revival of the overall economy and for creating jobs and livelihoods.

Political parties and 18th Lok Sabha election contestants must prioritize the manufacturing sector and assert their commitments in their manifestos and agendas. Voters, especially the youth, the workers, and the entrepreneurs, expect concrete and credible plans and policies to boost the manufacturing sector and make it more competitive, resilient, and sustainable.

To achieve this goal, the parties and candidates should consider the following suggestions, which are based on the best practices and recommendations of various stakeholders in the field of manufacturing engineering:

1. India has strong capabilities in sectors such as pharmaceuticals, chemicals, textiles and apparel, and automotive. These sectors have the potential to increase their exports, create more jobs, and attract more investments. Manifestos must focus their specific commitments to enhance competitiveness in sectors by providing incentives, infrastructure, and regulatory support, and by facilitating their integration with global value chains.
2. India has the opportunity to tap into the growing markets for sectors such as electronics, biotechnology, and aerospace. Also new and emerging sectors such as renewable energy, e-commerce, digital services, healthcare, and financial technology. Both these require high levels of innovation, technology, and skills, and can offer high-value-added products and services. Manifestos must focus on their specific commitment to encourage the development of these sectors by investing in research and development, fostering collaboration between industry and academia, and creating conducive ecosystems for startups and innovation.
3. India desperately needs the Implementation of the National Manufacturing Policy (NMP) launched in 2011 to increase the share of manufacturing in GDP to 25% by 2022, create 100 million jobs, and enhance competitiveness and sustainability. The envisaged creation of National Investment and Manufacturing Zones (NIMZs) that integrate industrial townships with world-class infrastructure and facilities needs on the ground realization. Manifestos must focus on their specific commitment to implementing the NMP and expediting the establishment and operation of the NIMZs.
4. Industry 4.0 characterizes the convergence of advanced technologies such as artificial intelligence, robotics, the Internet of Things, big data, and cloud computing. It can enable smart, connected, and flexible manufacturing systems to improve efficiency, quality, and customization. Manifestos must focus on their specific commitment to adopting industry 4.0 technologies and practices by providing incentives, training, and standards, and by addressing the challenges of cybersecurity, data privacy, and digital divide.
5. The micro, small, and medium enterprises (MSMEs) are the backbone of the manufacturing sector, accounting for about 45% of the output and 40% of the employment. However, MSMEs are facing tough constraints, such as a lack of access to finance, technology, markets, and skilled labor. Manifestos must focus on their specific commitment to extending credits, subsidies, tax benefits, and infrastructure support, and facilitating the linkages between the MSMEs and the large enterprises, both domestic and foreign.
6. The Indian manufacturing sector needs a skilled and qualified workforce to meet the changing and diverse demands of the industry. However, there is a wide gap between skilled worker supply and demand as well as a mismatch between the skills imparted by the education and training system and the skills required by the industry. Manifestos must focus on their specific commitment to enhancing workforce quality and skills by bridging this gap and mismatch, by reforming the education and training system, aligning it with the industry needs, and providing incentives, recognition, and opportunities for skill development and upgradation.

These key propositions are a must for 18th Lok Sabha contestants to formulate and present their vision and strategy for the Indian manufacturing sector. By doing so, they can win the trust and confidence of the voters, especially the youth, the workers, and the entrepreneurs, who are looking for a better future for themselves and the country. Manufacturing is not only a key factor for the elections but also a key factor for the development and prosperity of India.