Business

The Contribution of Manufacturing Industry in the Economic Growth of Country

The Manufacturing Sector Plays a vital role in the economic growth of the country it has gone many changes over the years with the advancements of technology. Goods manufactured have great demand for exports due to high quality. It generates a large number of employment, this sector is a highly skilled and highly paid job. One job in the manufacturing sector creates 2-3 jobs in the service sectors. 

It provides the job to middle-class families. India is the manufacturing hub for the electronics, Leather, Textile sector. The leather sector has evolved from supplying raw materials to exporting the final goods. There are hundreds of leather manufacturers in India. India is the 2nd largest producer of leather and footwear in the world. 

Technologies such as the Internet of things(IoT), Big Data, 3D Printing, Cloud Computing, nanotechnology used to make the goods and services competitive in the global market. Two types of goods are manufactured one is raw materials which can be used to produce another product, 2nd is final goods which can be sold directly to consumers. 

Lean Manufacturing is used to remove waste from the manufacturing system, which is not useful for the customers.

Agile Manufacturing is market adaptable, it quickly responds to the market change.

Mass Manufacturing can be used for the mass production of goods at one time.

Top Manufacturing Sectors in India –

  • Auto Industry
  • Chemical Engineering
  • Electronics Engineering
  • Food Processing
  • Gems and Jewellers
  • Machine tools
  • Textiles
  • Mining Industry

The Manufacturing industry played important role in the economic growth of developing countries like India. Manufacturing provides wealth most equitably among the people, it pulls the people above the poverty line. It contributes 30 %– 50% of GDP in developing countries. The government launched the Make in India scheme by which the manufacturing sector contributes 25% of GDP.

The Government launched various schemes to promote manufacturing and export from the countries. Under MEIS Scheme exporters can avail of the benefits in the form of duty credit scrip. EPCG Scheme launched to import duty-free machinery which can be installed to produce the export goods, license under the EPCG Scheme is issued on the basis of export obligation which can be fulfilled by the export of six times of duty saved amount in six years. India is the most suitable option for the manufacturing industry, there are the following factors which affect the manufacturing sector.

  • Good Infra
  • Legal Compliances
  • Tax structure of the country
  • Labour Laws
  • Environmental standards

The government of India introduced the Advance Authorisation Scheme under foreign trade policy to save the customs duty on the import of inputs required to manufacture the export goods, which helped Indian Manufacturers to save the money and utilize it for the working capital of the country.

The manufactured goods have great importance in the trade business. As per the World Trade Organization (WTO) 80% of trade is done of Manufactured goods and 20% from the service industry.

Service industries are dependent on the manufacturing industry for the technological need and it is considered as national power depends on the Manufacturing power of the country. In the world there are 4-5 companies hold 75% manufacturing production.

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