Disruption in the global supply chain has opened up opportunities for large-scale manufacturing in India, aided by significant policy initiatives. The policies are production-linked-incentive (PLI) schemes and low corporate tax rates for new manufacturing.
Structural issues like cost of land and electricity, lack of adequate infrastructure and shortage of skilled manpower could play the spoilsport if not addressed on time, says industry.
The government has unveiled a $27 billion worth of PLI scheme for 13 sectors to help integrate Indian companies into the global value chains and tap into the opportunity. The PM Gati Shakti - National Master Plan (NMP) which brings together 16 ministries to enable integrated planning and coordinated implementation of infrastructural connectivity, is expected to lower logistics costs significantly. The corporate tax rate for new manufacturing has been reduced to 15%.
Vikram Kirloskar, chairman (manufacturing council), the Confederation of Indian Industry, feels it is time for the industry to step up. He said that, the government measures can give added incentive but it is upon manufacturers to improve upon scale and quality. The government and businesses see the opportunity but acknowledge the need for improvement in the enabling framework. In the medium term to long term, India will have to address its structural issues, according to NITI Aayog CEO Amitabh Kant. In the short term, he believes it is extremely important to enhance ease of doing business in manufacturing.
Image Source: Google India
Source: The Economic Times
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