Initiatives Taken by the
Government to Boost Manufacturing
Government of India has undertaken several
schemes/initiatives to promote manufacturing sector.
The annual growth rate of Manufacturing
Sector as per Index of Industrial production (IIP), with base year 2011-12, for
last three years, is as under:
|
Annual Sectoral Growth rate (in %) from 2019-20
to 2021-22 |
|||
|
Sector |
2019-20 |
2020-21 |
2021-22 |
|
Manufacturing |
-1.4 |
-9.6 |
11.8 |
Source:
National Statistical Office.
The growth of manufacturing sector was
adversely affected due to COVID-19 pandemic, which has shown positive growth in
double digits in the Financial Year 2021-2022.
Schemes undertaken by DPIIT to promote
manufacturing sector
Government of India has undertaken various
steps to promote manufacturing sector and to boost domestic and foreign investments
in India. These include introduction of Goods and Services Tax, reduction in Corporate tax, interventions to improve ease of doing business,
FDI policy reforms, measures for reduction in compliance burden, policy measures
to boost domestic manufacturing through public procurement orders, Phased Manufacturing
Programme (PMP), to name a few.
The series of measures taken by the Government
to improve the economic situation and convert the disruption caused by COVID 19
into an opportunity for growth includes Atmanirbhar packages,
introduction of Production Linked Incentive (PLI) Scheme in various Ministries,
investment opportunities under National Infrastructure Pipeline (NIP) and National
Monetisation Pipeline (NMP), India Industrial Land Bank (IILB), Industrial Park
Rating System (IPRS), soft launch of the National Single Window System (NSWS), etc.
An institutional mechanism to fast-track investments has been put in place, in the
form of Project Development Cells (PDCs) in all concerned Ministries/ Departments
of Government of India.
Keeping in view India’s vision of becoming
‘Atmanirbhar’ and to enhance India’s Manufacturing capabilities
and Exports, an outlay of INR 1.97 lakh crore (over US$ 26 billion) has been announced
in Union Budget 2021-22 for PLI schemes for 14 key sectors of manufacturing, starting
from fiscal year (FY) 2021-22. With the announcement of PLI Schemes, significant
creation of production, skills, employment, economic growth and exports is expected
over the next five years and more.
The reforms taken by Government have resulted
in increased Foreign Direct Investment (FDI) inflows in the country. FDI inflows
in India stood at US $ 45.15 billion in 2014-2015 and have continuously increased
since then, and India registered its highest ever annual FDI inflow of US$ 84.84
billion (provisional figures) in the financial year 2021-22.
As per Economic Survey 2021-22, inspite of Covid related disruptions there is trend of positive
overall growth of Gross Value Addition (GVA) in manufacturing sector. The total
employment in this sector has increased from 57 million in the year 2017-18 to 62.4
million in the year 2019-20.
Details of some of the major initiatives
/schemes are as follows:
1. Make in India initiative: ‘Make in India’ is an initiative which
was launched on 25th September 2014 to facilitate investment, foster innovation,
build best in class infrastructure and make India a hub for manufacturing, design
and innovation. It was one of the unique single, vocal for local initiative that
promoted India’s manufacturing domain to the world. ‘Make in India’ initiative is
not the state/district/city/area specific initiative, rather it is being implemented
all over the country.
2. Industrial Corridor Development Programme:
In order to accelerate growth in manufacturing,
Government of India (GoI) has adopted the strategy of
developing Industrial Corridors in partnership with State Governments. The objective
of this programme is to develop Greenfield Industrial regions/areas/nodes with sustainable
infrastructure & make available Plug and Play Infrastructure at the plot level.
As part of National Industrial Corridor Program, 11 Industrial Corridors are being
developed in 4 phases.
3. Ease of Doing Business: The objective is to improve Ease of Doing
Business and Ease of Living by Simplifying, Rationalizing, Digitizing and Decriminalizing
Government to Business and Citizen Interfaces across Ministries/States/UTs. The
key focus areas of the initiative are simplification of procedures, rationalization
of legal provisions, digitization of government processes, and decriminalization
of minor, technical or procedural defaults.
4. National Single Window System: The setting up of National Single Window
System (NSWS) was announced in the Budget 2020-21 with the objective to provide
“end to end” facilitation and support to investors, including pre-investment advisory,
provide information related to land banks and facilitate clearances at Centre and
State level. Envisioned as a one-stop shop for investor related approvals and services
in the country, the National Single Window System (NSWS) was soft-launched on 22nd
September, 2021 by Hon’ble Commerce & Industry Minister. Large number of States/UTs
Single Window Systems have been linked with the NSWS Portal thereby providing access
to approvals of these States/UTs to be applied through NSWS.
5. PM Gati Shakti
National Master Plan (NMP): PM
Gati Shakti National Master Plan (NMP), a GIS based platform
with portals of various Ministries/Departments of Government, was launched in October,
2021. It is a transformative approach to facilitate data-based decisions related
to integrated planning of multimodal infrastructure, thereby reducing logistics
cost. Empowered Group of Secretaries (EGoS) and Network
Planning Group (NPG) have been created as institutional arrangement. About 2000
data layers of various Central Ministries/Departments/State Governments have so
far been uploaded on the NMP.
For enhanced capital expenditure by states
for infrastructure development, the Ministry of Finance, Department of Expenditure
through the “Scheme for Special Assistance to States for Capital Investment for
2022-23” on 6th April 2022 has made a
additional provision of Rs. 1,00,000 crore for disbursement
among the states as long term loans at a zero interest rate. Out of this, under
Part II of the scheme Rs 5,000 crore are specifically provided for PM GatiShakti related expenditure.
6. National Logistics Policy: National Logistics Policy (NLP) was launched
on 17th September 2022, that aims to lower the cost of logistics and lead it to
par with other developed countries. It is a comprehensive effort to address cost
inefficiency by laying down an overarching interdisciplinary, cross-sectoral, and
multi-jurisdictional framework for developing entire logistics ecosystem. This would
boost economic growth, provide employment opportunities, and make Indian products
more competitive in the global market.
7. Production Linked Incentive scheme: Keeping in view India’s vision of becoming
‘Atmanirbhar’, Production Linked Incentive (PLI) Schemes
for 14 key sectors have been announced with an outlay of Rs. 1.97 lakh crore to
enhance India’s Manufacturing capabilities and Exports. These schemes have potential
for creation of high production, economic growth, exports and significant employment
over the next five years and more.
8. Indian Footwear and Leather Development
Programme (IFLDP): The
Central Government has approved the Central Sector Scheme ‘Indian Footwear and Leather
Development Programme (IFLDP)’ in January, 2022 with an allocation of Rs.1700 crore
till 31.03.2026 or till further review, whichever is earlier. The expenditure of
last three years made under previous scheme of Indian Footwear, Leather and Accessories
Development Programme (IFLADP) is as under:
|
(Rs. in crore) |
|||
|
Year |
2019-20 |
2020-21 |
2021-22 |
|
Expenditure under IFLADP |
382.79 |
153.38 |
228.48 |
9. North East Industrial and Investment Promotion
Policy (NEIIPP), 2007:
North East Industrial and Investment Promotion Policy
(NEIIPP), 2007 was notified for a period of 10 years from 1.4.2007 to 31.03.2017
with the purpose to boost industrialization of the region. The registered eligible
units continue to receive benefits under grand-parenting of scheme. Funds allocated
under the NER Schemes during the last three years are as below:
|
Subsidy released under NEIIPP, 2007 (Rs. in Crore) |
||||
|
Name of the State/UT |
2019-20 |
2020-21 |
2021-22 |
TOTAL |
|
Arunachal Pradesh |
4.60 |
0.99 |
16.75 |
22.34 |
|
Assam |
396.75 |
168.98 |
139.40 |
705.13 |
|
Manipur |
26.93 |
0 |
0 |
26.93 |
|
Meghalaya |
61.16 |
20.91 |
9.33 |
91.40 |
|
Mizoram |
0.17 |
2.11 |
1.17 |
3.45 |
|
Nagaland |
1.82 |
0 |
0 |
1.82 |
|
Sikkim |
86.81 |
2.23 |
10.39 |
99.43 |
|
Tripura |
5.29 |
4.78 |
2.96 |
13.03 |
|
TOTAL |
583.53 |
200.00 |
180.00 |
963.53 |
10. North East Industrial Development Scheme
(NEIDS), 2017:
To promote industrialization in NE States and to boost
employment and income generation, a new Scheme namely North East Industrial Development
Scheme (NEIDS), 2017, came into force w.e.f. 01.04.2017 for a period of five years.
The scheme covered manufacturing and service sector.
|
Subsidy released under NEIDS, 2017 (Rs. in crore) |
||||
|
Name of the State/UT |
2019-20 |
2020-21 |
2021-22 |
TOTAL |
|
Assam |
1.00 |
15.00 |
30.00 |
46.00 |
|
TOTAL |
1.00 |
15.00 |
30.00 |
46.00 |
11. Industrial schemes covering manufacturing
& service sector in the UTs of J&K and Ladakh and State of Himachal Pradesh
and Uttarakhand were launched. Scheme-wise details
of expenditure during the last three years are as under:
|
(Rs. in crore) |
|||||
|
|
Name of Scheme |
2019-20 |
2020-21 |
2021-22 |
Total |
|
a. |
Special Package Scheme |
|
|
|
|
|
|
J&K and Ladakh |
79.91 |
42.16 |
28.17 |
150.24 |
|
|
Himachal Pradesh |
31.01 |
0.01 |
0 |
31.02 |
|
|
Uttarakhand |
21.04 |
2.79 |
0.16 |
23.99 |
|
b. |
Industrial Development Scheme for J&K and Ladakh |
- |
- |
43.41 |
43.41 |
|
c. |
Industrial Development Scheme for Himachal Pradesh and Uttarakhand |
- |
- |
131.90 |
131.90 |
Schemes undertaken by other Ministries/ Departments
to promote manufacturing sector
12. Schemes to encourage domestic manufacturing
of pharmaceutical drugs including
bulk drugs and medical devices
are as follows;
i.
The
Scheme for Promotion of Bulk Drug Parks, with a financial outlay of Rs. 3,000
crores and the tenure from FY 2020-2021 to FY 2024-25, provides for financial assistance
to three States for establishing Bulk Drug Parks.
ii.
The
scheme of Strengthening of Pharmaceutical Industry (SPI), was launched with
a financial outlay of Rs. 500 crores and the tenure from FY 2021-2022 to
FY 2025-26, to provide infrastructure support for pharma MSMEs in clusters and to
address the issues of technology upgradation of individual pharma MSMEs.
iii.
Under
the scheme “Promotion of Medical Devices Parks”, final approval for financial
assistance of Rs. 100 crore each, has been given to the States of Uttar Pradesh,
Tamil Nadu, Madhya Pradesh and Himachal Pradesh for establishment of common facilities
in their Medical Device Parks.
13. Modified Programme for Semiconductors
and Display Manufacturing Ecosystem:
In furtherance of the vision of Aatmanirbhar Bharat and
positioning India as the global hub for Electronics System Design and Manufacturing,
a comprehensive program for the development of semiconductors and display manufacturing
ecosystem in India was approved by Government of India with an outlay of 76,000
crore (>10 billion USD). The Programme contained various schemes to attract investments
in the field of semiconductors and display manufacturing.
14. FAME-India Scheme (Faster Adoption and
Manufacturing of (Hybrid &) Electric Vehicles): In order to promote manufacturing of
electric and hybrid vehicle technology and to ensure sustainable growth of the same,
FAME-India Scheme- Phase-I [Faster Adoption and Manufacturing of (Hybrid &)
Electric Vehicles in India] was implemented from 1st April 2015 for a
period of two years which was subsequently extended upto
31st March, 2019. Total outlay of Phase-I of the FAME-India Scheme has
been enhanced from Rs. 795 Crore to Rs. 895 Crore.
The Phase-II of FAME-India scheme proposes
to give a push to electric vehicles (EVs) in public transport and seeks to encourage
adoption of EVs by way of market creation and demand aggregation.
15. Udyami Bharat Scheme: ‘Udyami Bharat’
is reflective of the continuous commitment of the government, right from day one,
to work towards the empowerment of Micro Small and Medium Enterprises (MSMEs). The
government has launched several initiatives from time to time like MUDRA Yojana,
Emergency Credit Line Guarantee Scheme, Scheme of Fund for Regeneration of Traditional
Industries (SFURTI) etc. to provide necessary and timely support to the MSME sector,
which has helped benefit crores of people across the country. ‘Raising and Accelerating
MSME Performance’ (RAMP) scheme with an outlay of around Rs 6000 crore, aims to
scale up the implementation capacity and coverage of MSMEs in the States, with impact
enhancement of existing MSME schemes.
16. PM Mega Integrated Textile Region and
Apparel (PM MITRA):
In order to have world-class industrial
infrastructure which would attract cutting age technology and boost FDI and local
investment in the textiles sector, Ministry of Textiles issued notification to set
up 7 Mega Integrated Textile Region and Apparel (PM MITRA) Parks with a total outlay
of Rs. 4,445 crore. These parks will offer an opportunity
to create an integrated textiles value chain right from spinning, weaving, processing/dyeing
and printing to garment manufacturing at one location.PM MITRA scheme aspires to
position India strongly on the Global textiles map.
This information has been given by the
Minister of State for Commerce and Industry, Som Parkash
in reply to a parliamentary question on 9 December 2022.
ANNEXURE-II
ANNEXURE RFERRED TO IN REPLY TO PART (d) OF THE RAJYA
SABHA UNSTARRED QUESTION NO. 425 FOR ANSWER ON 9TH DECEMBER, 2022.
Annual Growth rate (in %) for NIC 2-digit
category from 2019-20 to 2021-22
|
NIC 2008 |
Description |
2019-20 |
2020-21 |
2021-22 |
|
10 |
Manufacture of food products |
2.0 |
-2.7 |
5.9 |
|
11 |
Manufacture of beverages |
-2.6 |
-25.8 |
11.5 |
|
12 |
Manufacture of tobacco products |
1.3 |
-14.3 |
8.7 |
|
13 |
Manufacture of textiles |
-2.5 |
-21.3 |
29.3 |
|
14 |
Manufacture of wearing apparel |
0.3 |
-29.9 |
27.4 |
|
15 |
Manufacture of leather and related products |
-1.8 |
-18.0 |
1.3 |
|
16 |
Manufacture of wood and products of wood and
cork, except furniture; manufacture of articles of straw and plaiting
materials |
8.3 |
-19.6 |
15.1 |
|
17 |
Manufacture of paper and paper products |
-12.8 |
-23.3 |
17.7 |
|
18 |
Printing and reproduction of recorded media |
-7.1 |
-28.0 |
12.4 |
|
19 |
Manufacture of coke and refined petroleum
products |
0.0 |
-12.2 |
8.9 |
|
20 |
Manufacture of chemicals and chemical products |
-0.4 |
-2.1 |
4.3 |
|
21 |
Manufacture of pharmaceuticals, medicinal
chemical and botanical products |
-0.1 |
1.6 |
1.3 |
|
22 |
Manufacture of rubber and plastics products |
-7.4 |
-3.7 |
8.0 |
|
23 |
Manufacture of other non-metallic mineral
products |
-1.9 |
-12.9 |
20.1 |
|
24 |
Manufacture of basic metals |
11.0 |
-5.8 |
18.6 |
|
25 |
Manufacture of fabricated metal products, except
machinery and equipment |
-14.7 |
-13.7 |
10.9 |
|
26 |
Manufacture of computer, electronic and optical
products |
-10.5 |
-12.6 |
11.1 |
|
27 |
Manufacture of electrical equipment |
-4.5 |
-12.3 |
12.2 |
|
28 |
Manufacture of machinery and equipment n.e.c. |
-12.7 |
-14.1 |
11.0 |
|
29 |
Manufacture of motor vehicles, trailers and
semi-trailers |
-18.3 |
-19.1 |
18.4 |
|
30 |
Manufacture of other transport equipment |
-6.2 |
-18.0 |
1.6 |
|
31 |
Manufacture of furniture |
-7.2 |
-27.9 |
23.3 |
|
32 |
Other manufacturing |
-12.5 |
-22.5 |
49.0 |
Source: National Statistical Office.