DMPQ- What are the concerns associated with Industrial sector in India?

Industrial sector is a crucial sector for sustainable growth of India. The sector growth rate and its contribution to overall growth is not sufficient enough for achieving double digit growth. The benefit of achieving industrial growth is that it is employment friendly and it is a self priming system. The constraints in the development of Industrial sector are as follows:

Regulatory uncertainty: Regulatory risks and policy uncertainty in the past have dented investor confidence.

  • Investment: There has been a cyclical slowdown in fresh investment since 2011-12.
  • Technology adoption: The adoption of new technologies like artificial intelligence, data analytics, machine-to-machine communications, robotics and related technologies, collectively called “Industry 4.0”, are a bigger challenge for SMEs than for organized large-scale manufacturing. Data security, reliability of data and stability in communication/transmission also pose challenges to technology adoption.
  • Exports and insufficient domestic demand: There has been no export driven industrial growth. Domestic demand alone may not be adequate for sustained, high value manufacturing.
  • Challenges to doing business: Despite recentimprovements in our global EODB rank, it continues to be a drag on the system. This is also true of investment conditions in the states. Getting construction permits, enforcing contracts, paying taxes, starting a business and trading across borders continue to constrain doing business.


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