First things first – India is, now, one of the top 10 industrial nations of the world with a 1.5% share in manufacturing value added (MVA), according to the International Yearbook of Industrial Statistics 2011 report.
While the MVA of industrialized countries grew by 3.4% in 2010; that of developing economies progressed with a robust 9.4% growth. Even as India’s high growth of industrial production has made significant impact in its share of globally manufactured goods, a bitter fact remains that India still lags considerably when it comes to the voluminous manufactured exports from China.
Someone has rightly said that China is the world’s manufacturing hub. Moreover, this tag has not come by default – there was a strategic plan somewhere, which accounted for the principle of acceleration in manufacturing goods; better known as mega manufacturing hubs.
China’s rapid penetration into industrial markets accounted for significant migration of global manufacturing capacity to the mainland, backed by rapid move towards capital-intensive and high-technology industries – rendering its goods cheaper and most competitive globally.
On the other hand, manufacturing in India has been plagued by draconian laws, inefficient infrastructure facilities, land acquisition controversies, regulatory hurdles and various other bottlenecks to the path of industrial growth.
However, some trade analysts are of the view that China’s rapid aging population and one-child policy is set to dramatically shrink its workforce and allow India to take it over as world’s manufacturing powerhouse sometime in future.
Better late than never – now, even the Indian government is mulling creation of manufacturing hubs, in line with the model adopted by China to boost its manufacturing sector, by fast tracking the National Manufacturing and Investment Zones (NMIZs) spread over 2000 hectares.
The Department of Industrial Policy and Promotion aims to create massive employment opportunities, catalyze industrial growth and sustainable development in India through tax incentives, single-window clearance policy and flexible labor laws. These NMIZs are envisaged as bigger than SEZs, covering states and even groups of states and facilitating world-class infrastructure facilities.
During the Union Budget 2011-12, Pranab Mukherjee had targeted India’s share of manufacturing in GDP to grow from 16% currently to 25% over the next decade, powered by the new manufacturing policy.
So, I want your frank view, from the core of your heart, can India really replicate the Chinese model of creating manufacturing hubs?