Despite several measures taken by the Centre to boost manufacturing, it is the services sector that has contributed most to growth. To further its push, the government on Wednesday approved production-linked incentives worth ₹2 trillion to help local firms scale. Mint explores.
Despite several measures taken by the Centre to boost manufacturing, it is the services sector that has contributed most to growth. To further its push, the government on Wednesday approved production-linked incentives worth ₹2 trillion to help local firms scale. Mint explores.
Why has manufacturing space remained muted?
India’s growth story has been peculiar as the bulk of our recent growth has come primarily from the services sector. Typically, economies transition from agriculture to manufacturing to services, but India missed the middle stage. There are several reasons behind this: Policies adopted during the licence raj era, labour and land laws, high cost of capital, surging tax rates and complicated regulations. A relatively low rate of productivity and lack of adequate supply of electricity at competitive rates have also kept growth in India’s manufacturing sector depressed over the years.
Source: livemint
