The National Manufacturing Policy, recently cleared by a group of ministers (GoM), will increase manufacturing sector's contribution to the gross domestic product (GDP) and create 100 million jobs, a leading industry lobby said on Sunday.
"The GoM’s clearance of the policy has raised industry’s hopes for an early announcement of the National Manufacturing Policy, which aims to enhance manufacturing contribution to 25% by 2025," said Confederation of Indian Industry (CII) Director General Chandrajit Banerjee.
"It also aims to create 100 million jobs and put manufacturing sector into a high growth trajectory, making India a favoured destination for manufacturing," he added.
Currently the manufacturing sector contributes 15% to India's GDP as compared to 34% in China, 40% in Thailand and and 26 to 30% in South Korea, Poland, Turkey and Malaysia.
Even the total workforce absorbed by the industry at 12% is lower than that of other countries with China and Germany at 28 and 22% respectively.
According to CII, manufacturing contribution to employment generation can increase up to 25-30% in India if the share of manufacturing to the national GDP reaches 25%.
The growth in this industry has so far been hampered due to high transaction costs, inadequate infrastructure, rigid labour costs, stringent exit mechanisms and lack of skilled manpower, further compounded by high inflation, rising interest rates and current global and domestic uncertainties.
"The policy would usher in far reaching and fundamental reforms that would arrest the declining industrial output. It envisages creating National Investment and Manufacturing Zones which would radically change the way of doing business in India," said the industry lobby.
"Simplified business procedures and approval systems, expeditious exit policy, third party certifications, technology development etc are directional in CII's views and would shape a robust manufacturing sector in India," it added.
Union minister Sharad Pawar led GoM Friday resolved issues over the much awaited National Manufacturing Policy.