How can the new government make India a global manufacturing hub Autosaved 
CRISIL, INDIA
How can the new government make India a Global manufacturing Hub
CRISIL Young Thought Leader
Senil Abraham
Contents
Executive Summary 2
Introduction 3
Labor Law: 4
Labor Productivity 7
Infrastructure 8
Taxation Laws 10
Frugal Innovation 10
Conclusion 11
References 12
Executive Summary
India has always been known as the services economy. Most of the investment inflows have been in services sector while the manufacturing sector has been left behind. This has resulted in lesser contribution by the manufacturing sector to GDP growth. Going forward, however the “Make in India” campaign might become the next big success story. With India maintaining its cost competitiveness, all global players are looking at it as the next opportunity destination. It could attract an investment of about $300 billion by 2015 leading to an overall increase in the share of manufacturing output. However there are various hurdles to achieve this target. This paper tries to analyze the key issues underlying the slow growth of the sector and tries to suggest various solution for a sustainable growth.
The paper tries to understand the implications of labor laws on the manufacturing sector. How it has led to an increase in the informal sector and what all changes can be made in the law.
Labor productivity and its overall implications on the industrial productivity has been looked upon in depth and various global best practices applicable to it has been suggested.
Paper draws upon the critical aspect of infrastructure and the various processes that can be implemented to make it world class. It analyzes the current bottlenecks and tries to find a way to implement the projects effectively.
Finally, the paper looks upon the USP of India, “Frugal Engineering” and suggests how it can leverage this advantage to make itself globally competitive country.
Introduction
Economist Nicholas Kaldor had proposed that growth in GDP is positively related to growth in manufacturing
How can the new government make India a Global manufacturing Hub
CRISIL Young Thought Leader
Senil Abraham
Contents
Executive Summary 2
Introduction 3
Labor Law: 4
Labor Productivity 7
Infrastructure 8
Taxation Laws 10
Frugal Innovation 10
Conclusion 11
References 12
Executive Summary
India has always been known as the services economy. Most of the investment inflows have been in services sector while the manufacturing sector has been left behind. This has resulted in lesser contribution by the manufacturing sector to GDP growth. Going forward, however the “Make in India” campaign might become the next big success story. With India maintaining its cost competitiveness, all global players are looking at it as the next opportunity destination. It could attract an investment of about $300 billion by 2015 leading to an overall increase in the share of manufacturing output. However there are various hurdles to achieve this target. This paper tries to analyze the key issues underlying the slow growth of the sector and tries to suggest various solution for a sustainable growth.
The paper tries to understand the implications of labor laws on the manufacturing sector. How it has led to an increase in the informal sector and what all changes can be made in the law.
Labor productivity and its overall implications on the industrial productivity has been looked upon in depth and various global best practices applicable to it has been suggested.
Paper draws upon the critical aspect of infrastructure and the various processes that can be implemented to make it world class. It analyzes the current bottlenecks and tries to find a way to implement the projects effectively.
Finally, the paper looks upon the USP of India, “Frugal Engineering” and suggests how it can leverage this advantage to make itself globally competitive country.
Introduction
Economist Nicholas Kaldor had proposed that growth in GDP is positively related to growth in manufacturing