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
The Economic Times