Faster economic growth requires increased share of the manufacturing sector in GDP, particularly of MSMEs. Comment on the present policies of the Government in this regard. (150 words)
Micro, Small, and Medium Enterprises play a pivotal role in India’s economy. They contribute about 30% of the GDP, 45% of manufacturing output, and employ 111 million people. The Government of India has taken steps to enhance the manufacturing sector and increase MSMEs’ GDP contribution.
Policies and Initiatives:
- National Manufacturing Policy: Targets a manufacturing GDP share of 25% by 2025.
- Make in India: Boosts both domestic and foreign investments in manufacturing.
- Production Linked Incentive (PLI) Scheme: Directs INR 1.97 lakh crore to 14 key manufacturing sectors for growth and employment.
- Atmanirbhar Bharat Package: Supports business during the COVID-19 pandemic.
- Ministry of MSME Schemes: Provides financial aid, skill enhancement, infrastructure, and tech upgrades for MSMEs.
- MUDRA Loans: Lends to MSMEs under Shishu, Kishore, and Tarun categories.
Challenges and Way Forward:
The manufacturing sector’s GDP share remains at around 15%. To boost this:
- Address structural problems: Focus on credit accessibility, infrastructure, and technology.
- Simplify regulations: Minimize business administrative and regulatory constraints.
- Foster innovation: Prioritize research and development.
- Skill development: Channel investments into education and training.
Conclusion:
Uplifting the manufacturing sector’s GDP share via MSMEs is crucial for rapid economic growth. While current government policies have brought about change, addressing the key challenges will further reinforce India’s manufacturing prowess.
